Wyeth Exec Accused of Taking Kickbacks to Fix Contracts

(MoneyWatch)  Wyeth has accused one of its shipping managers of taking kickbacks to assign contracts, resulting in ?1.3 million in overcharges for air freight shipments. The Irish Times says the accused are:

Patrick Walsh, former shipping manager of Wyeth's Newbridge plant, of Old Town Rise, Sallins Road, Naas, Co Kildare, and Elite Logistics Ltd (in liquidation). In defences submitted, the claims have been denied.

Wyeth alleges that Walsh arranged for Elite to get a substantial portion of Wyeth's air freight work and allowed Elite to overcharge for the work. Elite then returned to Walsh "bribes or secret commissions."

The overcharges were allegedly made when Walsh told Elite what Wyeth's annual transportation budget would be. They then inflated the weight of each cargo assigned to Elite, but kept the cargoes under the total budget so as not to trigger suspicion.

The scam brings to mind the recent Pharmed case, in which Carlos and Jorge de Céspedes were accused of skimming drug supply contracts they had with Roche and Johnson & Johnson in order to line their own pockets. The brothers got nine years in prison, according to the Miami Herald:

In August 2004, Roche Healthcare abruptly stopped using Pharmed, resulting in the company losing $300 million in annual revenue. Roche gave no explanation for its move, but in recent court testimony it was revealed that a Roche audit discovered the brothers had been engaging in a complex plot that used Roche supplies in violation of their contract.

About the same time, Pharmed's original supplier, Johnson & Johnson, also ended its relationship with the brothers, accusing them of ''unjust enrichment'' in collecting $22 million in rebates to which they were not entitled.

BNET's previous coverage of the Pharmed-Roche case:

• Brothers Who Ripped Off Roche for Millions Beg for Mercy