Former Virginia Governor Bribery Case Grows Class-Action Wings
CHICAGO (CN) - A federal class action claims the makers and hawker of a "wonder drug" called Anatabloc push it with false claims that it can treat Alzheimer's and multiple sclerosis - and bribed the former governor of Virginia to endorse it.
Lead plaintiff Howard T. Baldwin sued Star Scientific, Rock Creek Pharmaceuticals, and GNC Holdings.
The complaint states: "Star Scientific bribed the now-indicted former Virginia governor and his wife to promote Anatabloc from the governor's mansion."
Former Gov. Robert McDonnell and his wife, Maureen, are not parties to this lawsuit. Their alleged role in pushing the drug will be described later in this article.
Star Scientific, of Glen Allen, Va., "claims to be a specialty pharmaceutical company engaged in the development, manufacture, and marketing of bioequivalent pharmaceutical products in addition to the development of branded products," Baldwin says in the lawsuit.
Rock Creek, of Gloucester, Mass., is a wholly owned subsidiary of Star and makes and sells "two nutraceutical dietary supplements." Both are Delaware corporations. GNC, also a Delaware corporation, sells diet supplements through 7,000 or so General Nutrition Corp. outlets.
"Defendants manufacture, market and/or sell Anatabloc, a dietary supplement purportedly derived from an anatabine alkaloid found in tobacco, tomatoes, potatoes, and eggplant," according to the complaint. "Defendants promote Anatabloc as a 'wonder drug' with a number of medical benefits and uses, from treating excessive inflammation (associated with arthritis) to Alzheimer's disease, traumatic brain injury (or concussions), diabetes and multiple sclerosis.
"The problem, however, is that defendants have never proven any of these substantial claims in clinical trials or received U.S. Food and Drug Administration (FDA) approval for its products. Moreover, Anatabloc is not the 'wonder drug' it claims to be." (Parentheses in complaint.)
Star Scientific claims the drug treats arthritis, Alzheimer's disease, concussions, diabetes and multiple sclerosis - all "conditions without a cure" whose sufferers are recognized by the Federal Trade Commission as common targets of "health fraudsters."
"Knowing the wonder drug was too good to be true, Star Scientific and Rock Creek (collectively, 'Star Scientific') launched a marketing ploy in which they conveyed the false and misleading impression that Johns Hopkins University School of Medicine ('Johns Hopkins') was officially and independently sponsoring and carrying out studies of Anatabloc in order to give scientific credibility to the claims about the products' miraculous medical benefits and uses. In fact, however, Star Scientific had hired Drs. Paul Ladenson and Patrizio Caturegli, who worked at Johns Hopkins, as paid consultants. Johns Hopkins had no role in the studies whatsoever," Baldwin says.
Under the heading: "Star Scientific bribed the now-indicted former Virginia governor and his wife to promote Anatabloc from the governor's mansion," the complaint states: "Ahead of its launch of the product, Star Scientific embarked on a national promotional tour, in which Star Scientific bribed its CEO's political friends to promote the unproven Anatabloc. The first stop was a June 1, 2011, conference at Roskamp, which was attended by scientists and institutional investors alike. At the conference, Star Scientific's CEO introduced the First Lady of Virginia, Virginia Governor Robert McDonnell's wife, Maureen. In her speech, Mrs. McDonnell expressed her full support for Anatabloc, stating that the product could be used to lower health care costs in Virginia and around the country, and in a grand, prestaged gesture, publicly offered the Executive Mansion to host the upcoming launch party. According to one investor who attended the event, her speech 'wowed attendees.' Over the next several months, Mrs. McDonnell attended numerous events in which she publicly endorsed Anatabloc.
"Star Scientific capitalized on the positive press generated from the First Lady of Virginia's public endorsement by holding the launch party at the Virginia Governor's Executive Mansion, which was announced in a company press release dated August 30, 2011. The governor and his wife hosted and attended the event and their presence gave Anatabloc credibility. According to John Clore, a professor at the Virginia Commonwealth University School of Medicine, who attended the event, 'It was an event that was designed to make a big splash. ... That was the week it was showing up in stores.'"
The specific allegations of bribery are in paragraph 33 of the 41-page lawsuit: "On January 21, 2014, the former Virginia governor was indicted for accepting lavish bribes from Star Scientific in return for the promotion of Anatabloc. Among other gifts, Star Scientific: (i) had donated nearly $80,000 worth of air travel to Governor McDonnell for his 2009 gubernatorial campaign and during his recent term in office; (ii) provided nearly $10,000 worth of food, lodging, transportation, and entertainment from the company and defendant [Jonnie] Williams in 2011 and 2012; (iii) paid for nearly $15,000 in catering costs for the June 2011 wedding of the McDonnells' daughter and another $10,000 to help pay the expenses of their other daughter's wedding in 2013; (iv) flew Mrs. McDonnell to New York in the spring of2011 and treated her to an expensive shopping spree consisting of$15,000 worth of clothes; (v) used Star Scientific's corporate jet to fly Mrs. McDonnell around to each of the stops on Star Scientific's national promotional tour; and (vi) bought a $6,500 Rolex watch for Mrs. McDonnell to give to the governor."
Although the lawsuit describes Williams as "defendant Williams," he is not listed as a defendant in the header of the complaint, nor as a defendant in section III, "Parties."
The FDA sent Star Scientific a warning letter in December 2013 for touting Anatabloc as a treatment for serious diseases without scientific support.
The McDonnells were indicted on Jan. 22, charged with 14 counts involving accepting gifts from Star Scientific and/or Williams, obstruction, and honest services wire fraud.
Meanwhile, Baldwin claims, "Defendants charged the exorbitant price of approximately $99 per bottle of Anatabloc - despite the fact that the 'wonder drug' cannot treat or cure arthritis, Alzheimer's disease, traumatic brain injury (or concussions), diabetes or multiple sclerosis."
He seeks class certification and punitive damages for violation of state consumer protection laws, breach of warranty, and unjust enrichment.
He is represented by Elizabeth Fegan with Hagens, Berman, Sobol, Shapiro in Oak Park.