Company hits trifecta: alleged monkey-trafficking, mass neglect of beagles, & accused of stock fraud
MIAMI, Florida––It isn’t easy to get caught in the middle of the biggest monkey-smuggling case associated with biomedical research, the biggest beagle neglect case in the history of vivisection, and the alleged biggest pump-and-dump stock-selling scandal to hit biomedical research investors, all in the same year, but the laboratory animal supply firm Inotiv managed to do it.
Inotiv, moreover, hit the trifecta with six weeks left in 2022 in which to win another disreputability sweepstakes, though it is difficult to imagine what poop the company might manage to step in that could be as noxious as the first three piles.
Buyer from alleged monkey-smugglers nabbed in federal bust
The U.S. Attorney’s Office for the Southern District of Florida did not mention Inotiv on November 16, 2022 in announcing that “Members of an international primate smuggling ring have been charged with multiple felonies for their role in bringing wild long-tailed macaques into the United States.
“The eight-count indictment,” the U.S. Attorney’s Office said, “charges two officials of the Cambodian Forestry Administration, Ministry of Agriculture, Forestry & Fisheries; the owner/founder of a major primate supply organization and its general manager; and four of its employees with smuggling and conspiracy to violate the Lacey Act and the Endangered Species Act.”
The Lacey Act of 1900, the oldest U.S. wildlife protection law still on the books, prohibits interstate traffic in illegally obtained wildlife or wildlife parts.
The alleged perps
The seven named defendants included four residents of Phnom Penh, Cambodia, and four residents of Hong Kong, China.
The Cambodian government officials included Omaliss Keo, 58, and Masphal Kry, 46.
The apparent kingpin of the alleged smuggling ring is James Man Sang Lau, 64, of Hong Kong, founder/owner of Vanny Resources Holdings, Ltd., and of the Cambodian subsidiary Vanny Bio Research Corporation Ltd.
Also charged were Vanny employees Dickson Lau, Sunny Chan, and Sarah Yeung of Hong Kong, and Raphael Cheung Man, 71, and Hing Ip Chung, 61, both of Phnom Penh.
“If convicted,” the U.S. Attorney’s Office media release said, “each defendant faces up to five years in prison on the charge of conspiracy and up to 20 years imprisonment on each of the smuggling charges. There also are potential fines with respect to each count of up to $250,000 or twice the financial gain to the defendants.”
“Black market collectors & corrupt officials”
The charges were filed after Kry was arrested on November 16, 2022 at John F. Kennedy International Airport in New York City.
According to allegations of the indictment, long-tailed macaques (Macaca fascicularis), sometimes known as crab-eating macaques, are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and require special permits in order to be imported into the U.S.
“The indictment further alleges,” the U.S. Attorney’s Office said, “that James Lau and Dickson Lau, operating from Hong Kong, owned and managed a series of related corporations that conspired with black market collectors and corrupt officials in Cambodia to acquire wild-caught macaques and launder them through the Cambodian entities for export to the U.S. and elsewhere, falsely labelled as captive bred.”
“Inotiv gets most of its monkeys from Vanny”
Observed Science online editor David Grimm, “The companies running the facilities are not named in the indictment, but in a filing with the U.S. Securities and Exchange Commission last week, Inotiv disclosed that its principal supplier of nonhuman primates was the target of the Department of Justice probe, indicating that the company gets most of its monkeys from Vanny.
“Last year,” Grimm recounted, “Inotiv purchased the major research animal supplier Envigo, making it the world’s largest supplier of nonhuman primates for research. The company currently houses more than 9,000 monkeys—the vast majority cynomolgus macaques, also known as crab-eating or long-tailed macaques—which it sells to private and academic labs.”
University of Wisconsin at Madison virologist Dave O’Connor told Grimm that the indictment of the alleged monkey traffickers “will likely exacerbate the shortage of these monkeys, used in everything from drug safety testing to vaccine research,” Grimm wrote.
The late Shirley McGreal exposed parallel racket
“Cynomolgus macaques,” Grimm continued, “are by far the monkey species most imported to the United States. Nearly 30,000 entered the country last year, according to data from the U.S. Centers for Disease Control & Prevention, which regulates the import of nonhuman primates.
“Most cynomolgus macaques are used by pharmaceutical and biotechnology companies,” Grimm explained. “Rhesus macaques, another heavily used monkey species in U.S. biomedical research, are mostly used by the academic community, which largely obtains them from national primate research centers. Cynos are also the main monkey species imported to Europe for research.”
Cynomolgus macaques “are typically bred in large facilities in Asia,” Grimm said, but investigations directed by the late International Primate Protection League founder Shirley McGreal had by 2007 repeatedly discovered “monkey-laundering” going on through China on a grand scale.
Traffic moved from China to Cambodia
Typically, Chinese companies would buy wild-caught macaques from entrepreneurs in other nations, house them briefly in Chinese warehouses, and then export them to the U.S. with fake paperwork claiming they were born in China.
“China used to be the main supplier of cynos,” Grimm wrote, “exporting approximately 30,000 in 2018, but the country shut off its supply during the pandemic, which experts have attributed to the trade war with the United States and China’s desire to beef up its own biomedical industry.
‘Cambodia now exports the largest share of cynos,” Grimm said, “more than 29,000 in 2020, the vast majority of which were shipped to the United States.
“Nearly 1,500 ‘laundered’ cynos arrived in the United States from 2018 to 2020, according to the indictment,” Grimm finished, “with potentially hundreds more in 2021. They appear to have ended up at facilities in southern Florida and southern Texas.”
Earlier in 2022, concerned by possible effects of the biomedical research traffic on the wild population, the International Union for Conservation of Nature amended the trade status of cynomolgus macaques from “vulnerable” to “endangered.”
Inotiv beagles evacuated
Humane Society of the U.S. president Kitty Block on September 6, 2022 announced that HSUS and “rescue partners” had the previous week completed relocating 3,776 beagles from the former Inotiv beagle-breeding compound in Cumberland, Virginia.
The compound, built in 1961, is now closed after having become notorious over 60 years of operation under a succession of owners and several more business names apparently adopted to try to hide the grim history of the site.
The beginning of the end for the Inotiv beagle-breeding colony came, recounted Washington Post writer Lizzie Johnson on October 17, 2022, when Showing Animals Respect & Kindness [SHARK] founder Steve Hindi flew a drone “over the beagle breeding facility in Cumberland, offering a glimpse of a place that had existed for more than six decades but had rarely faced scrutiny.”
Actually Hindi first droned the beagle barns in 2017, and the SHARK drones were never actually over the beagle barns, as Hindi illustrated in an early November 2022 online video.
The video demonstrates how dual cameras simultaneously captured close-ups of the beagles and established the position of the drones in public air space: https://www.youtube.com/watch?v=ngom_rh9WIQ.
ANIMALS 24-7 reported within days on the SHARK video surveillance done in 2019; see Covance beagle breeding kennels: they are not Snoopy’s doghouse.
Other media took much longer to notice.
“In the nearly five-minute video,” Johnson continued, “the outdoor cement enclosures were stained with urine and feces. Beagles jumped against the chain-link walls as some fought with each other for dominance. One dog ate a pile of poop. Another walked laps around its cage. The keening of the dogs was overpowering.
“Drone pilot Hindi recorded the footage over two days,” Johnson explained. “At that point, the facility — part of a global animal testing market valued at $10.7 billion in 2019 — was owned by the pharmaceutical company Covance. Within weeks of the drone flight, the 52,000 square-foot facility switched hands after part of Covance was acquired by Envigo,” an Inotiv subsidiary.
Inotiv claimed to have invested more than $3 million in site improvements, but significant improvements were not visible in subsequent SHARK drone flights.
PETA confirmed SHARK findings
People for the Ethical Treatment of Animals meanwhile independently confirmed the SHARK findings with an on-the-ground undercover investigation.
“Within six months,” said Johnson, “PETA [on October 14, 2021] went to the USDA with its evidence.
“Eleven days later, a team from the USDA’s Animal & Plant Health Inspection Service arrived at Envigo’s gate. Over a 10-month span from July 2021 to May 2022, the team conducted five inspections, citing the facility 74 times — the majority for serious violations.
“Seven weeks after that, more than a hundred federal and state officials, law enforcement officers, rescue volunteers and veterinarians arrived at Envigo with a search warrant. Over five days, they seized health records, computers, and 446 beagles — about 10 percent of the facility’s dogs — who were suffering life-threatening illnesses or injuries.”
Here comes the judge
Running out of patience after Envigo repeatedly failed to comply with orders to fix deficiencies noted by the USDA-APHIS inspectors, U.S. District Court Judge Norman K. Moon late on July 1, 2022 ordered Envigo to surrender to the Humane Society of the U.S. all of the estimated 4,000 beagles who then remained on the premises.
The Moon order facilitated the largest impoundment of dogs from a laboratory animal breeding compound in the 57-year history of the Animal Welfare Act, originally passed in 1966 as the Laboratory Animal Welfare Act.
“What followed,” Johnson wrote, “was two months of beagle mania, as people across the country showered the Humane Society of the U.S. with $2.2 million in donations and clamored to adopt the dogs. Prince Harry and Meghan Markle took in a beagle. So did the governor of New Jersey and the chief meteorologist at a Virginia news station.
Where oh where could the little dogs be?
“But the beagle emancipation was cloaked in secrecy. Almost no one was allowed to see the dogs leave Envigo,” Johnson said.
Further SHARK droning indicated that the number of beagles still at Envigo when the mass evacuation began would be substantially less than the 4,000 claimed by the Humane Society of the U.S., though the actual final total of 3,776 was only 224 short of the initial estimate.
The Envigo/Inotiv beagle breeding compound in Cumberland was at one time the biggest in the U.S., and may still have been second only to the Marshall Farms Group, Ltd. colony near Lake Ontario in New York, which housed 21,283 dogs, 2,693 pigs, and 52,116 ferrets in 2021, according to a` USDA inspection report.
Tangled corporate history
Founded in 1974 as Bioanalytical Systems Inc. in West Lafayette, Indiana, the company now called Inotiv began selling public shares in 1997. It changed names to Inotiv in March 2021.
Inotiv on September 21, 2021 announced the purchase of Envigo, headquartered in Indianapolis, Indiana.
Envigo already had a tangled corporate history, involving several of the most controversial companies in the laboratory animal supply field.
The Envigo beagle breeding facility in Cumberland first became notorious among animal advocates while operated by Hazelton Laboratories. It was sold to Covance, and was still owned by Covance as of 2019, but Covance was by then a subsidiary of LabCorp, having been sold to LabCorp in 2014.
Envigo was formed in 2015 through a merger with Harlan Laboratories and Huntingdon Life Sciences. Envigo bought LabCorp, including the Cumberland facilities, in June 2019.
All five companies involved in the Envigo corporate history before the Inotiv purchase had their own histories of repeated Animal Welfare Act violations.
A lawsuit filed on June 23, 2022 in Indianapolis alleges on behalf of shareholders that Inotiv in effect pulled a “pump-and-dump“ scheme that inflated its stock value, leaving stock buyers holding the bag when the stock value crashed.
The law firm Wolf Haldenstein Adler Freeman & Herz LLP contends in the lawsuit that the “pump-and-dump” occurred when:
- Envigo and Inotiv’s Cumberland, Virginia facility engaged in widespread and flagrant violations of the Animal Welfare Act;
- Envigo and Inotiv did not properly remedy issues with regards to animal welfare at the Cumberland facility;
- as a result, Inotiv was likely to face increased scrutiny and governmental action;
- Inotiv would imminently shut down two facilities, including the Cumberland facility;
- Inotiv did not engage in proper due diligence; and
- as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times
Proving that Animal Welfare Act violations are the actual cause of a loss in stock value would normally be very difficult.
In the case of Envigo and Inotiv, however, the alleged chain of cause-and-effect extends only from September 21, 2021 to June 13, 2022, and not much more seems to be involved than the purported pump-and-dump.