On August 4, 1994, a federal grand jury in Minnesota issued a 47 page indictment charging
Caremark, two of its officers (not the firm's chief officer), an individual who had been a sales
employee of Genentech, {964} Inc., and David R. Brown, a physician practicing in Minneapolis,
with violating the ARPL over a lengthy period. According to the indictment, over $ 1.1 million had
been paid to Brown to induce him to distribute Protropin, a human growth hormone drug marketed
by Caremark.6
The substantial payments involved started, according to the allegations of the
indictment, in 1986 and continued through 1993. Some payments were "in the guise of research
grants", Ind. P20, and others were "consulting agreements", Ind. P19. The indictment charged, for
example, that Dr. Brown performed virtually none of the consulting functions described in his 1991
agreement with Caremark, but was nevertheless neither required to return the money he had
received nor precluded from receiving future funding from Caremark. In addition the indictment
charged that Brown received from Caremark payments of staff and office expenses, including
telephone answering services and fax rental expenses.