Founder of Valley opioid manufacturer Insys arrested; company at center of fraud lawsuit

Posted at 9:44 AM, Oct 26, 2017
and last updated 2017-10-27 13:38:38-04

The founder and majority owner of a large Valley pharmaceutical company and opioid manufacturer has been arrested.

On Thursday morning, John Kapoor, the founder and CEO of Insys, was arrested in Phoenix, according to the US Attorney's Office. The 74-year-old was arrested on charges including racketeering, conspiracy and fraud. 

Kapoor is expected to appear in federal court in Phoenix on Thursday, the US Attorney's Office says.  

According to Forbes, Kapoor is worth $1.79 billion as of Thursday morning. He also owns Roka Akor Japanese eateries in Scottsdale and other parts of the country. 

A lawsuit was filed against the Chandler-based company in August alleging they "engaged in fraudulent marketing schemes designed to increase the sales of Subsys, a highly addictive opioid prescription drug that contains fentanyl."

Attorney General Mark Brnovich filed the lawsuit seeking an injunction to stop Insys from continuing false representations. He wants the company to provide restitution for patients and wants disgorgement of all profits and gains from the alleged illegal conduct.  

A former employee also told ABC15 that the company's practices were "all fraud.

The arrest comes on the same day that President Trump is expected to declare the nation's opioid crisis a public health emergency, White House officials tell CNN.

The state released a report that showed Arizona had 790 opioid deaths in 2016 -- a 16 percent increase from the previous year. Prescription opioids caused 482 deaths.