Drugmaker gets fine, halfway house sentence for 2 bribes

December 14, 1990|By Kelly Gilbert | Kelly Gilbert,Evening Sun Staff

The multimillionaire founder of a Chicago generic drug company has been fined $25,000 and sentenced to three months in a halfway house for bribing a U.S. Food and Drug Administration branch chief in Rockville and another government official in Philadelphia.

Judge John R. Hargrove suspended nine months of a one-year term for defendant Kun Chae Bae and ordered him to perform 1,000 hours of community service while he serves three years on probation afterward.

Hargrove, who imposed the sentence in U.S. District Court in Baltimore yesterday, said it was "a compromise" between the need to send a message to other drugmakers and a "reward" for Bae's cooperation with federal prosecutors in a continuing investigation of the generic drug industry.

Bae also pleaded guilty to a gratuities charge for giving Joseph Micelli, an official at the FDA's medical directorate in Philadelphia, a $400 videocassette recorder, a trip to Chicago and $500 in travel expenses. Prosecutors there said Bae bribed other employees at the Defense Personnel Support Center in return for their help in obtaining supply contracts for his company.

The defendant was instrumental in Chang's conviction on racketeering charges and was a key government witness at the October perjury trial of Dr. Marvin Seife, former director of the FDA's Division of Generic Drugs. Seife was convicted.

Bae told Hargrove that he experienced hunger and poverty as a youth in war-torn South Korea, but seized the opportunity to be educated in the United States. He said he "worked very hard" to become a success here.

"I had a dream to do the best I could," Bae said remorsefully. "Now I am a convicted felon . . . and I have to explain that to my children and grandchildren."

Prosecutors Gary P. Jordan and Geoffrey R. Garinther credited Bae with full cooperation in the probe, which has led to the convictions of 16 FDA and generic drug officials and companies.

Bae, who started My-K Laboratories with $1,000 in 1973 and sold it for nearly $20 million in 1988, now owns a Chicago-area bank and numerous rental properties and is believed to be among the richest of the generic drug defendants.

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