FDA Chemist Gets Five Years in Prison for Insider Trading
3/7/2013 8:12:47 AM
A U.S. Food and Drug Administration chemist was sentenced to five years in prison for using his access to the agency’s drug-approval process to make $3.78 million in an insider-trading scheme. Cheng Yi Liang, who worked for the FDA’s Center for Drug Evaluation and Research, was sentenced today by U.S. District Judge Deborah Chasanow in Greenbelt, Maryland, after pleading guilty last year to one count of securities fraud and one count of making false statements. Liang, 58, was also ordered to forfeit more than $3.7 million. The government sought a sentence at the “high end” of the guidelines’ range of 57 to 71 months, claiming that Liang’s “insider trading conduct” falls within the top 14 percent of insider trading cases filed between 2006 and 2010, according to court papers. “Cheng Yi Liang bought and sold stocks based on non-public information, and he tried to conceal his crimes by using the names of friends and relatives,” U.S. Attorney Rod J. Rosenstein said in an e-mailed statement. “Mr. Liang violated his duty of loyalty to the FDA and profited from inside information.” From July 2006 to March 2011, Liang bought and sold stock in more than 25 companies based on inside information from the FDA, according to a charging document. As part of his plea, Liang agreed to forfeit more than $3.7 million in bank and brokerage accounts and property, including his home in Gaithersburg, Maryland. Liang resigned from the FDA on Sept. 9. ‘Deeply Sorry’ About $1 million of the forfeited funds have already been recovered, Liang’s lawyer, Joseph Evans, said in an e-mail. “Dr. Liang is deeply sorry for his misconduct,” said Evans, an assistant federal public defender. “Along with the shame that he has brought to his family and friends, he feels especially bad for the FDA for whom he had worked for so many years. He also understands that his actions harmed the United States of America which took him in and permitted him to become a citizen.” Liang, an FDA employee since 1996, worked in the drug evaluation unit since at least 2001.
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