$3.9M Embezzled, Bergen Co. Drug Company CEO Indicted: U.S. Attorney

TEANECK, NJ — A former owner and CEO of a Teaneck pharmaceutical company was indicted for embezzlement, U.S. Attorney Philip Sellinger said.

John Klein, 76, who lived in Alpine at a time(s) relevant to the indictment, was indicted by a grand jury on one count of wire fraud for his role in an embezzlement scheme. He had been previously charged by complaint.

As the owner of Cambridge Therapeutic Technologies, Klein misappropriated millions of dollars from the pharmaceutical company for his personal use, from May 2016 to January 2017, the indictment said.

In May 2016, a prescription drug distribution company paid $3.9 million for products sold by CTT into a bank account that Klein controlled. After the wire transfers, Klein made numerous personal expenditures out of the account, including credit card payments for him and his wife, payment of property taxes on his Alpine home, and tuition payments for Klein's child's private school.

Although he had diverted the customer payment for his own personal use, between December 2016 and January 2017, Klein instructed CTT's Chief Financial Officer to write off the $3.9 million as un-collectable bad debt, the indictment said.

CTT wrote off the money due as an "allowance for doubtful account," or an account that CCT did not expect to be able to collect from, when, in reality, Klein had received and used the funds.

The wire fraud charge carries a maximum penalty of 20 years in prison and a fine of $250,000, Sellinger said.