SynPep Corporation Allegedly Falsified Purity Levels of Peptides Sold
SAN FRANCISCO – LAWFUEL – Press Release Service – United States Attorney Kevin V. Ryan announced that Dr. Chi Yang, 48, and the company he ran for more than ten years, SynPep Corporation, were indicted today on thirteen counts of mail fraud and false statements for falsifying the purity levels of peptides sold to customers. As part of the scheme to defraud, SynPep is alleged to have manipulated purity graphs (chromatograms), added potentially impure or crude product to peptides, and misrepresented the time of the testing or the identity of the product that was tested and ultimately sent to customers.
According to the charges, for at least five years, employees at SynPep, upon direction from Yang, falsified the purity levels of peptides sold to hundreds of research institutions across the country. These research institutions included both private and public entities, pharmaceutical companies, and agrochemical industries. Companies and research institutions would order peptides from SynPep with certain specifications, such as quantity, weight, a certain sequence, and a specific purity (e.g., 80% pure; 98% pure).
“Research institutions and others rely on the integrity of biotech companies to provide accurate specifications of their products,” said U.S. Attorney Kevin V. Ryan, member of the President’s Corporate Fraud Task Force. “SynPep allegedly falsified graphs that were used in support of cancer or AIDS research, and that research may now be called into question. This indictment demonstrates our continuing commitment to ensuring corporate integrity in the biotech industry.”
As part of the fraud, Yang directed employees to employ one of several types of lab fraud when the peptide produced did not meet the customer’s specifications. One such method was “peak shaving.” “Peak shaving” is a fraudulent technique where the purity levels of a peptide are altered on a chromatogram to make the peptide appear more pure. A chromatogram is a graph used to measure the actual purity of peptide. SynPep employees would “cut and paste” over impurities found on the chromatogram. The employees then copied the chromatogram with the impurity peaks hidden by pieces of paper and presented the customer with the doctored, “cleaner” version. The doctored chromatogram did not accurately represent the purity of the peptide sent. Customers received the doctored chromatogram along with a certificate of authenticity that also misrepresented the peptide’s actual purity.
SynPep, a Dublin, California, company, manufactured peptides, which are single linear chains of amino acids. Proteins consist of one or more peptides. Biotech companies, public and private research institutions, pharmaceutical companies, and agrochemical industries routinely purchased peptides from SynPep for research purposes. Such research included cancer and AIDS research, among other things.
“The defendants are alleged, among other charges, to have submitted false lab data to federal health agencies,” said Nick Torres, EPA’s Special Agent-in-Charge, San Francisco. “Accurate data is essential for the government to effectively protect the public and those who knowingly falsify such data will be prosecuted.”
Hundreds of customers were affected by the scheme, with numerous researchers now questioning not only their purchase of SynPep peptides, but the results of the research conducted using SynPep peptides.
Yang is expected to self-surrender and make his initial appearance in federal court in Oakland on Thursday, May 25th, at 10:00 a.m., in front of Magistrate Judge Wayne Brazil.
The maximum statutory penalty for each count of mail fraud in violation of Title 18 U.S.C. § 1341 is 20 years and a fine of $250,000, plus restitution. The maximum penalty for each count of false statement in violation of Title 18 U.S.C. § 1001 is 5 years and a fine of $250,000, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
An indictment contains only allegations against an individual and, as with all defendants, Mr. Yang must be presumed innocent unless and until proven guilty.
AUSAs Stacey Geis and Ioana Petrou are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Legal Technician Ana Guerra. The prosecution is the result of a two year investigation by the Department of Health & Human Services Office of Inspector General, the U.S. Environmental Protection Agency Criminal Investigation Division, the Federal Bureau of Investigation, the Department of Defense Office of Inspector General, the Department of Energy Office of Inspector General, the California Department of Toxic Substances Control, the California Division of Occupational Safety & Health, and the Alameda County District Attorney’s Office.
Further Information:
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.plhttps://ecf.cand.uscourts.gov/.
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay@usdoj.gov.
