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January 31, 2008

Update: Ex-CVS execs want bribery charge dropped

PROVIDENCE -- Lawyers for two former CVS executives asked a federal judge today to force prosecutors to turn over FBI notes of its interviews with former state Sen. John Celona, who they are accused of paying off, and asked the judge to dismiss a bribery charge.

John R. "Jack" Kramer, former CVS senior vice president for corporate affairs and government relations, and Carlos Ortiz, former vice president of government affairs, are charged with one count each of conspiracy and bribery and 21 counts each of fraud for contracting with Celona.

Celona, who resigned from the General Assembly in 2004 amid questions about his business dealings with CVS, pleaded guilty to federal mail fraud charges in 2005 for his relationships with CVS, Blue Cross & Blue Shield of Rhode Island and Roger Williams Medical Center.

Woonsocket-based CVS Caremark Corp., the nation's largest drugstore chain, has not been charged and has said it is cooperating with the probe. Kramer and Ortiz have been on unpaid leaves of absence from CVS since 2004.

The bribery charge in the January 2007 indictment accuses Ortiz and Kramer of giving Celona gifts between 1999 and 2003 as a way to influence Celona "in connection with legislation of interest to CVS." The charge doesn't specify particular bills, but refers to other parts of the indictment that discuss specific legislation.

While prosecutors argue that other parts of the indictment were specific enough to address the concern, Scott Corrigan, a lawyer for Kramer, said the language amounted to a "moving target."

-- The Associated Press

"We're talking about five legislative sessions," Corrigan said. "During each of those sessions, hundreds of bills were introduced."

U.S. District Judge Mary Lisi appeared concerned. "'Legislation related to CVS doesn't tell you a whole heck of a lot," Lisi said.

Celona was the star witness in an earlier trial involving executives for Roger Williams, and admitted at trial that he lied to the FBI a number of times. Because he is expected to be a key witness in any trial of Kramer and Ortiz, the defense is keenly interested in any instances when Celona lied because it could help cast doubt on his credibility on the stand.

While the defense team was given a summary report of nine separate interviews the FBI conducted with Celona between Sept. 1 and Nov. 17, 2004, as well as excerpts of some of those notes, it argues that other documents show Celona changed his story several times during that period.

David Fein, a lawyer for Kramer, told Lisi that the defense wanted the complete notes of those interviews. He said they could include instances where Celona told different versions of the same story, or additional information that could be helpful and was not included in the summary notes.

Assistant U.S. Attorney Gerard Sullivan told Lisi that prosecutors in the Roger Williams case had carefully gone through the documents' discrepancies, and those notes were turned over to the defense.

Lisi said she would issue a written ruling at a later date.

Earlier this month, the convictions of two former top Roger Williams Medical center executives, Robert Urciuoli and Frances Driscoll for allegedly paying Celona to press the hospital's legislative agenda at the State House, were overturned on appeal. The U.S. Attorney's Office said it will retry the case.

Today, Woonsocket-based CVS Caremark Corp. reported that fourth quarter profits were $815 million, or 55 cents a share, almost double the $417.2 million, or 49 cents a share, in the year-earlier period.

Last year, CVS completed a $27 billion purchase of Caremark RX to gain the second largest U.S. drug benefits manager. CVS and the Caremark division also benefited from demand for generic drugs.

-- With Journal and projo.com reports


Posted by Mike McKinney  at 5:51 PM | Permalink

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