The former billionaire was convicted in opioid trial on May 2. Kapoor’s trial unfolded like a tight script of a Bollywood potboiler.
His was a poster boy for the American Dream: a boy from small-town India, with modest means, comes to America on scholarship to study. With his hard work and tenacity, he goes on to launch pharmaceutical business that would become a multi-billion-dollar company. He is revered as a drug-maker and a pioneer – until it all comes crashing down one day. And the boy with dreams who inspired millions of immigrants is found to be guilty of one of the worst scams in the country ever.
John Nath Kapoor, the Indian American billionaire and founder of Insys Therapeutics Inc., was convicted of a racketeering conspiracy last week. He is the first chief executive officer of an opioid maker to be convicted.
Kapoor was found guilty of driving sales of highly addictive opioid, which led to a national epidemic. In 2017, Kapoor was arrested on charges of Racketeer Influenced and Corrupt Organizations Act (RICO) conspiracy, along with conspiracy to commit wire fraud and other crimes.
The charges arose from allegations that Kapoor was participant in a scheme that bribed the doctors to prescribe fentanyl, an opioid manufactured by his company under the brand name Subsys.
Last week, federal jurors in Boston found Kapoor guilty of bribing doctors to boost up sales of Subsys, while also duping insurers to cover dubious prescriptions. He was found guilty along with four other executives.
The verdict may serve as the final blow in Kapoor’s downfall. It looks almost certain that he will be forced to sell his shares in Insys and is imminently staring at huge financial penalties. Though Kapoor stepped down as the CEO and chairman of Insys in 2017, he continues to hold 60 percent of its stock. However, he fell of the billionaires’ list last year.
With Kapoor being denied a request for house arrest, the septuagenarian — he is believed to be in the mid-70s — be looking at a penalty of up to 20 years behind the bars.
After a 10-week-trial, on the day of the verdict, this past Thursday, Kapoor was in a somber mood. With the verdict out, the drug makers’ shares fell 1.7 percent.
Kapoor’s conviction also affected the shares of Akorn Inc., another pharmaceutical company where he is the majority shareholder.
As the trial unfolded, Kapoor’s modus operandi looked like a tight script of a Bollywood potboiler. There were testimonies in the court on how Insys lured doctors to write more prescriptions of Subsys in return for racy favors, such as lap dances, sexy sales reps and lavish dinners.
With the verdict announcing the once self-made billionaire guilty, his success story came crashing down like a pack of cards. The first person in his entire family to ever attend college, Kapoor’s story had inspired many.
He found a place on the list of Forbes Billionaire. With a net worth of $1.8 billion he was among 10 richest Indian Americans.
Even though Kapoor enjoyed his life among the rich and the famous, his start in India was far from the luxurious life he would later lead in America. Born in Amritsar, Punjab, Kapoor’s parents belonged to a modest family. After his schooling, he moved to Mumbai to study.
He earned a degree in pharmacy from Bombay University before coming to the United States on a scholarship. He received a PhD in Medicinal Chemistry from the State University of New York in Buffalo.
Kapoor started his career at the pharmaceutical company Invenex at Grand Island in New York. He showed his business acumen early on his career, when he took the company he worked, LyphoMed, public. He deftly managed its operations, including at a time of a scandal involving careless production standards that resulted in deaths of many patients.
A Phoenix, Arizona, resident, he also founded the John and Editha Kapoor Charitable Foundation, which supports the fight against cancer. It was founded after his wife died of breast cancer.
Kapoor also made a handsome donation to his alma mater, The University of Buffalo School of Pharmacy and Pharmaceutical Sciences. The school, named their building, John and Editha Kapoor Hall.
On May 2, as Kapoor was convicted, his name was tarnished, perhaps forever.