Drug maker from China pleads guilty

GeneScience Pharmaceutical, a Chinese company, and its chief executive pleaded guilty on Wednesday to federal charges of illegally distributing human growth hormone in the United States, capping a three-year investigation.

In United States District Court in Providence, R.I., they agreed to pay $3 million toward a "Clean Competition Fund" that would support drug-free sports, and $7.2 million in criminal forfeitures.

The company founder, Lei Jin, entered a guilty plea through a lawyer and was sentenced to five years' probation. The company pleaded guilty to a felony.

GeneScience was implicated in 2007 during "Operation Raw Deal," a crackdown on the international trafficking of steroids and other illicit body-building drugs.

A lawyer for the company presented a $4.5 million check Wednesday as a forfeiture of assets in the plea agreement. The government had previously seized $2.7 million from New York bank accounts linked to the company's growth hormone smuggling. The lawyer, John Tarantino, said in an e-mail that he was not authorized to comment.

Mr. Jin did not appear in court, according to Tom Connell, a spokesman for Peter F. Neronha, a United States attorney.

Human-growth hormone is banned in many sports. Mr. Neronha said in a statement, "H.G.H., when distributed and used unlawfully, poses a serious health threat, particularly to young people who ignore the risks of such substances in an effort to enhance athletic performance."

GeneScience, which identifies itself as China's most profitable biopharmaceutical company, had distributed a growth-hormone product called Jintropin in China and around the world through the Internet. It continues to operate in Changchun, in northern China, Mr. Connell said.

GeneScience was founded in 1996 by Mr. Jin, a Chinese citizen who held a Ph.D. in pharmaceutical chemistry from the University of California, San Francisco, and had worked as a research scientist at Genentech, one of the world's leading producers of human growth hormones.

A government complaint says the company and Mr. Jin used e-mail aliases, offshore bank accounts and a network of drug traffickers to illegally distribute millions of dollars worth of human growth hormone in the United States. The distribution had not been approved by the Food and Drug Administration.

The clean competition fund, to be administered by the Rhode Island Community Foundation, would support antidoping in sports, drug screening and clinical research into the long-term effects of human growth hormone, according to a court filing.

A lawyer representing GeneScience did not return phone calls or e-mail.

(Published by NY Times - October 7, 2010)

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