Former Pharma Executive Alleges Coercion by Judge in SEC Contempt Case

Former Pharma Executive Alleges Coercion by Judge in SEC Contempt Case

In a striking allegation, Craig Medoff, a former pharmaceutical executive, has asserted that a Massachusetts federal judge employed “coercive” tactics, suggesting he could evade criminal charges if he cooperated with the U.S. Securities and Exchange Commission (SEC). Medoff is currently entangled in a criminal contempt case for allegedly violating an SEC ban by using an alias.

 Ex-Pharma Exec Says Judge ‘Coercive’ In SEC Contempt Case: Judge’s Alleged Coercive Comments

Medoff’s attorney, Peter Charles Horstmann, filed a motion to dismiss the charges, claiming that U.S. District Judge Mark Wolf’s remarks were misleading. According to Horstmann, Judge Wolf implied during discussions last fall that Medoff’s cooperation in an SEC deposition could prevent the initiation of criminal proceedings. This interpretation led Medoff to believe that compliance with the SEC’s requests might spare him from further legal repercussions.

The Sequence Leading to Criminal Contempt

The controversy began when Medoff, under scrutiny, chose to engage with the SEC, providing detailed financial information through a deposition and affidavit. Despite this cooperation, which Horstmann argues was instigated by the judge’s “coercive” suggestions, Judge Wolf directed the U.S. Attorney’s Office in Boston to proceed with a criminal contempt complaint against Medoff in February.

Legal Arguments for Dismissal and Suppression

Horstmann’s motion not only seeks dismissal of the charges but also suppression of Medoff’s statements during the SEC deposition. He contends that these statements were made under the impression that they would forestall criminal charges—a belief purportedly seeded by Judge Wolf’s comments. Horstmann emphasizes that his client’s actions were based on an understanding that cooperation would lead to a favorable legal outcome, arguing that this misunderstanding warrants dismissal of the charges.

 Ex-Pharma Exec Says Judge ‘Coercive’ In SEC Contempt Case: Upcoming Trial and Previous Legal Developments

As Medoff prepares for his trial scheduled for April 29, the court recently rejected a plea agreement that would have limited his custody to no more than three months. This decision follows Judge Wolf’s refusal to recuse himself from the case, dismissing the request as a delay tactic. Medoff, a former executive at the now-defunct BioChemics Inc., is accused of deceitfully working under an alias shortly after agreeing to a 10-year ban from the securities industry in 2016.

 Ex-Pharma Exec Says Judge ‘Coercive’ In SEC Contempt Case: Background of SEC Legal Actions

BioChemics Inc. faced serious charges from the SEC, culminating in an $18 million consent judgment in 2015, which included penalties and disgorgement of profits due to false claims about a new drug delivery system they were developing. Despite the financial penalties imposed, the SEC has struggled to recover the full amount owed under the settlement.