A whistleblowing former paralegal at drug giant Sanofi is now claiming she was aware of "many instances" where Sanofi lawyers destroyed documents to avoid turning them over to opponents in prior legal cases.
Ex-Sanofi paralegal Diane Ponte's new allegation comes in an affidavit she filed in her pending lawsuit against the company.
Ponte's suit, filed last year, claims she learned of an alleged scheme at Sanofi to pay more than $30 million in kickbacks to promote the company's diabetes drugs. The suit came a year after the France-based drug company already agreed to pay more than $100 million to the U.S. federal government to settle other claims related to alleged kickbacks to doctors, and seven months after Sanofi agreed to pay a nearly $40 million fine in Germany in connection with two employees who were convicted there of paying bribes to boost drug sales.
"Prior to my last position with Sanofi, I had been working in the Sanofi litigation department for approximately seven years," Ponte wrote in her affidavit in Newark, New Jersey, court. "In the course of my working in the Sanofi litigation department, I became personally aware of many instances in which documents were deliberately destroyed by Sanofi attorneys to avoid turning over said documents in discovery."
The term "discovery" refers to the process in which opponents in civil litigation exchange documents and other evidence that are relevant to issues in their case, and which could affect the outcome of that case.
Sanofi, when contacted by CNBC about ongoing issues related to Ponte's case, said, "Sanofi does not comment on pending litigation." Last year, when Ponte's case was filed, it referred to her as a "disgruntled former employee who is opportunistically attacking our company," and called her allegations of employment law violations "without merit."
However, Sanofi attorney John Bennett recently argued in legal motions that Ponte's claim of document destruction was "false, scandalous and unsupported by any evidence."
Bennett also said that Ponte, while working at Sanofi, had never reported any such document destruction to the company's internal complaints system despite that she would have had an obligation to do so under Sanofi's Code of Business Conduct.
But Essex County Judge Michelle Hollar-Gregory refused during a hearing last week to strike the paragraph in Ponte's affidavit that alleges the document destruction by Sanofi's lawyers.
Court filings reveal other new details in the case.
Ponte's affidavit says that Sanofi's North American general counsel, Robert DeBerardine, and another lawyer at the company, Edward Berg, were not licensed to practice law in New Jersey for at least part of the time they were working as lawyers at Sanofi. That's despite Sanofi's North American headquarters, where Ponte had worked, being located in that state, and despite a state Supreme Court rule requiring in-house counsel at a company to obtain at least a limited license if they want to practice law in the state.
Sanofi claims in court papers that the two attorneys' law license status isn't relevant to Ponte's case, particularly since they were licensed to practice elsewhere in the United States. Sanofi also claims that DeBerardine applied for limited in-house counsel status in April 2013 and had it granted just last month. Berg's own June 2015 application for that status "is currently pending," the company said.
Ponte's suit filed last December claims that she was fired in September 2014 in retaliation for bringing the alleged kickback scheme to light, which led to an internal probe at Sanofi. She also claims that Sanofi's board fired then-CEO Christopher Viehbacher in October 2014 "in part" because Viehbacher "was involved in the aforesaid illegal and/or fraudulent activity."
The suit from Ponte alleges she was pressured in March 2013 to approve nine pending contracts Sanofi had with Accenture and Deloitte worth a total of $34 million. Her suit says that despite that she was being asked to review the contracts' legality, she learned they had actually been executed by Sanofi executive Raymond Godleski four months beforehand.
Her suit claims she determined that the contracts involved illegal incentives from the three companies to "induce customers, including physicians, hospitals and/or retail pharmacy programs such as Walgreens and Rite Aid to [among other things] influence the prescribing of drugs and/or improperly 'switch' from selling other manufacturers' drugs ... to selling Sanofi drugs, in violation of the aforesaid Federal healthcare laws."
Such alleged kickbacks or incentives are illegal because they can encourage the prescription of drugs covered by federal Medicare and Medicaid insurance programs, which in turn could mean that those programs end up paying more in reimbursements than they otherwise would have.
In 2012, Sanofi agreed to pay the federal government $109 million to resolve allegations that the company violated the federal False Claims Act by giving physicians free units of the knee injection Hyalgan in order to induce them to buy and prescribe the drug, in violation of the Anti-Kickback Statute.
In March 2013, two ex-Sanofi employees were sentenced by a court in Germany to suspended sentences, and Sanofi was fined 28 million euros ($29.8 million) in connection with a bribery case there. A spokesman for prosecutors told the Reuters news agency that the former employees made illicit payments to a consulting company that was advising a Sanofi client in order to get the client to order more drugs from Sanofi.
"Sanofi was unfairly given preference because of this," the spokesman told Reuters. A spokesman for Sanofi told that news agency earlier this year that the company had cooperated with the probe and had tightened its compliance system.
Also related to the ongoing case in New Jersey, Judge Hollar-Gregory last week refused, as least for now, to order Ponte or her lawyers to give back to the company documents related to Sanofi that are in their possession.
A CNBC reporter was present when Sanofi's lawyer Bennett argued in court that many if not all of the documents are subject to attorney-client privilege, and that Ponte had stolen the documents.
"It's not true!" angrily protested one of Ponte's lawyers, Chris Stueben, when Bennett referred to Ponte's alleged "stealing" of company information.
Ponte's lead lawyer, Rosemarie Arnold, said that many of the documents would not be subject to attorney-client privilege because they were seen by people not connected to Sanofi's legal department, as well as for other reasons.
"She was bullied by them," Arnold said of Sanofi, which is accused in Ponte's suit of creating a hostile work environment after she made her claims of wrongdoing there. "And now they're trying to bully her some more."
Among the documents that Ponte had in her possession is an email from one of Sanofi's in-house lawyers, Berg, written on March 21, 2013, after he was asked to review some contracts that had been flagged by Ponte as having potential legal issues.
Berg's email, which is in court records, has the subject line "contracts with Accenture."
Berg, writing that he was giving "a relatively quick review," said in the email that "the contract has almost no meaningful deliverables, is poorly constructed and incorrectly mentions Regulatory Review, with no mention of Legal review, when in fact the issues are most likely to create legal risk (kickback) rather than regulatory."
"My initial overall take is that the contract violates almost every principal of financial stewardship and good business practices, with few deliverables, an outlandishly short time frame, no consideration as to the clear legal issues in these types of engagements with customers," Berg wrote.
Despite Berg's apparent concern, Ponte alleges the company pushed for approval of the contracts.
Accenture and Deloitte are not named as defendants in Ponte's lawsuit. Accenture declined CNBC's request for comment when Ponte's suit was filed last year. Deloitte said at that time that "we are confident our contracts and services were entirely appropriate."
CNBC also has spoken to a former Sanofi contractor, who on Tuesday of this week described how then-Sanofi executive Godleski allegedly pressured her to enter incorrect codes for purchase orders so that the companies that were the subject of the questionable contracts, Accenture and Deloitte, could start getting paid.
The ex-contractor, Jean Kazimir, said Godleski, who is named as a defendant in Ponte's lawsuit, wanted the companies to get paid even though the contracts hadn't been approved by Sanofi's legal department, and despite that the purchase orders would have been for goods instead of for the services that were detailed in the contracts.
"I knew something wasn't right," Kazimir told CNBC. She said she had told Godleski he would need to put his request in writing, but that he never did so.
Kazimir's account is also cited in a federal class action lawsuit filed in Manhattan by shareholders against Sanofi. That suit alleges the company and then-CEO Viehbacher misled investors and inflated Sanofi's stock price by touting sales growth of its diabetes drugs "while omitting disclosure of the illegal practices used to achieve those sales." Those alleged illegal practices include the same ones at the center of Ponte's state court lawsuit.
Sanofi "funneled tens, if not hundreds, of millions of dollars in disguised payments to consultants Accenture and Deloitte, which according to whistleblowers served as middlemen in a scheme to induce pharmaceutical retailers and hospitals to favor Sanofi's diabetes drugs over competing drugs from Novo Nordisk," the Manhattan federal court suit claims. The whistleblowers are identified in the suit as Ponte and Kazimir.
Godleski's lawyer declined to comment on Kazimir's allegations.
Sanofi has asked a federal judge to dismiss the shareholders' lawsuit, arguing that the plaintiffs have failed to lay out sufficient legal grounds for their action.