Colorado

December 29, 2009

Colorado-Based Spectranetics Corporation To Pay $5 Million To Resolve Allegations Relating To Its Medical Devices (Civil Division)

DENVER – Spectranetics Corporation, a medical device manufacturer, has agreed to pay the United States $4.9 million in civil damages plus a $100,000 forfeiture to resolve claims against the company, the Justice Department announced today. The claims arise from allegations that the company illegally imported unapproved medical devices and provided them to physicians for use in patients, conducted a clinical study in a manner that failed to comply with federal regulations and promoted certain products for procedures for which the company had not received Food and Drug Administration approval or clearance.

The company manufactures, distributes and sells certain medical lasers and peripheral devices for those lasers, such as lead wires that guide the lasers through vascular tissue and catheters that carry and contain the lasers inside the veins, including, specifically, the CVX-300 Medical Laser and the CliRpath Turbo Laser Catheter, the TURBO Elite Laser Ablation Catheter, and the TURBO-Booster Laser Guide Catheter. 

In resolving this matter, Spectranetics has entered into a civil settlement agreement and a non-prosecution agreement with the United States. The company also entered into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services.

According to the non-prosecution agreement, officers and employees who acted on behalf of the company engaged in multiple areas of wrongdoing.  Specifically, Spectranetics illegally imported unapproved medical devices from overseas manufacturers and distributed  those devices for use in human patients, and failed to meet its reporting obligations to FDA regarding a study named “CORAL” (COronary graft Results after Atherectomy with Lasers) and another associated study in connection with the devices listed above. 

Under the terms of the non-prosecution agreement, Spectranetics has accepted responsibility for its conduct, has instituted remedial measures to prevent this conduct in the future, and will continue to cooperate in the ongoing criminal investigation.  As a result, Spectranetics will not be criminally prosecuted for this conduct.  Under the civil settlement agreement, the United States asserted that, as a result of the conduct described here and set forth in more detail in the civil agreement, Spectranetics caused false claims to be submitted to the Medicare Program during portions of the time period from 2003 to 2008.

“It is important to hold those who submit false claims to Medicare responsible for their actions,” said U.S. Attorney David Gaouette.  “Settlements such as this help to protect the integrity of the Medicare system.”

“The Department of Justice will be vigilant in pursuing cases against medical device companies that break the law and defraud taxpayers,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.

“Our compliance agreement with Spectranetics holds the company and its executives accountable for violations of Federal health care program and FDA requirements,” said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. “Records from Spectranetics’ clinical investigations will be audited by an Independent Review Organization to ensure compliance with FDA rules – including reporting of adverse events.”

The matter was handled by the U.S. Attorney’s Office for the District of Colorado, the Office of Consumer Litigation and the Commercial Litigation Branch of the Justice Department’s Civil Division and the Food and Drug Administration Office of Criminal Investigation. The corporate integrity agreement was handled by the Department of Health and Human Services Office of the Inspector General.

July 24, 2009

Denver Dentist and two Others Indicted for Conspiracy and Obtaining Controlled Substances by Fraud (U.S. Attorney for the District of Colorado)

DENVER - A federal grand jury in Denver has indicted a Denver dentist, and two of his friends, Acting U.S. Attorney David Gaouette and DEA Special Agent in Charge Jeffrey Sweetin announced on July 24, 2009. The dentist, David Hoag, age 49, of Boulder, who has his practice in Denver, and his two friends, James Poe, age 54, of Englewood, and Paul Nickless, age 48, of Centennial, have been charged with conspiracy and obtaining controlled substances by fraud.

According to the indictment, between April 2004 and February 2009, the defendants are charged with one count of knowingly conspiring with each other and others to obtain oxycodone, hydrocodone, Lorazepam, and Zolpidem by misrepresentations, fraud and deception. In addition to the conspiracy charge, Hoag and Poe are charged with 131 counts of knowingly obtaining controlled substances by fraud and deceit. Hoag and Nickless are charged with 283 counts of knowingly obtaining controlled substances by fraud and deceit. Each count represents a prescription written by Hoag and filled by Poe or Nickless. It was part of the agreement that after Poe and Nickless filled the prescriptions, they brought half of it back to Hoag for his personal use.

Each count of this indictment carries a penalty of not more than 4 years in federal prison, and up to a $250,000 fine. Hoag faces 416 counts. Poe faces 132 counts. Nickless faces 284 counts.

This case was investigated by the Drug Enforcement Administration (DEA).

Assistant U.S. Attorney Jaime Pena is prosecuting the case.

The charges contained in the indictment are only allegations and the defendants are presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the District of Colorado at http://www.usdoj.gov/usao/co/press_releases/2009/July09/7_24_09.html

July 6, 2009

Former Rose Medical Center Surgery Technician Named in Forty-Two Count Indictment Returned by Federal Grand Jury (U.S. Attorney for the District of Colorado)

Kristen Parker, a former Rose Medical Center surgery "scrub" technician, was indicted on July 23, 2009, by a federal grand jury in Denver, announced David Gaouette, Acting U.S. Attorney, Stephen Holt, Special Agent in Charge of the FDA Office of Criminal Investigations, Kansas City Field Office, and Jeffrey Sweetin, Special Agent in Charge of the Drug Enforcement Administration Denver Division. Parker, age 26, of Elizabeth, Colorado, was named in a 42 count indictment charging product tampering and obtaining controlled substances by deceit. She remains in federal custody, being held without bond pending a resolution of her case.

Kristen Parker was originally charged in a three count Criminal Complaint in U.S. District Court in Denver on July 2, 2009. She made her initial appearance in federal court on July 6, 2009, where she was advised of the charges pending against her. On July 9, 2009, Parker waived her right to a preliminary hearing. She did, however, contest her detention. U.S. District Court Magistrate Judge Craig B. Shaffer found at that hearing that Parker was a danger to the community. He ordered her held without bond.

Parker was a surgery "scrub" technician at Rose Medical Center in Denver and then at Audubon Surgery Center in Colorado Springs, where she assisted in surgical procedures. She had Hepatitis C while she worked at both facilities. Parker is accused of stealing a powerful narcotic drug, Fentanyl, from surgical patients. She would inject herself with a syringe containing the narcotic. She would then fill the same dirty syringe with saline and put it back on the surgical tray. Patients who needed the pain medication during surgery did not receive it. What they did receive, however, was exposure to Parker's Hepatitis C. To date 19 patients at Rose Medical Center have tested positive for Hepatitis C that can be linked back to Parker.

The indictment charges Parker with 21 counts of tampering with a consumer product and 21 counts of obtaining a controlled substance by deceit, or attempt. All of the indicted conducts relates to when Parker worked for Rose Medical Center. None of the charged conduct involves Audubon, although testing is only halfway complete at both places, and additional charges via superseding indictments are possible.

According to the indictment, between October 22, 2008, through April 15, 2009, Parker, with reckless disregard for the risk that another person will be placed in danger of bodily injury, and under circumstances manifesting extreme indifference to such risk, tampered and attempted to tamper with consumer products, namely the removal of Fentanyl from a syringe, and replacing it with other substances. Further, the indictment alleges that she knowingly and intentionally obtained, and attempted to obtain, Fentanyl by deceit.

"I would like to reassure the victims of Kristen Parker that prosecuting this case is a priority, and that their interests will be well represented," said Acting U.S. Attorney David Gaouette.

"The FDA Office of Criminal Investigations considers this illegal conduct very serious and is fully committed to investigating and supporting the prosecution of those who endanger the public health by tampering with medical products," said Steve Holt, Special Agent in Charge, FDA Office of Criminal Investigations, Kansas City Field Office. "We will continue to work with our law enforcement partners and commend the U.S. Attorney's Office for their diligence."

"Diversion of pharmaceutical drugs is a concern for our communities and our country," said DEA Special Agent in Charge Jeffrey Sweetin. "The diversion of drugs in this case is all the more concerning, because medical patients were being denied the prescribed drugs they needed to control pain during surgery. The cooperation of medical professionals is critical for DEA and law enforcement to effectively do our job in these types of investigations. We applaud the cooperation Rose Medical Center has given our agents, which has allowed charges to be filed in this case."

Parker faces not more than 10 years in federal prison, and up to a $250,000 fine for each count of tampering with a consumer product. If serious bodily injury occurred, she would face not more than 20 years in federal prison. If death of an individual occurs, she would face up to life imprisonment. If convicted of obtaining a controlled substance by deceit, or attempting to do the same, Parker faces not more than 4 years imprisonment, and up to a $250,000 fine for each count.

This case was investigated by the U.S. Food and Drug Administration Office of Criminal Investigations (FDA OCI), the Drug Enforcement Administration (DEA), the Denver District Attorney's Office, and the Denver Police Department.

Parker is being prosecuted by Assistant U.S. Attorney Jaime Pena.

These charges contained in the indictment are only allegations and the defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the District of Colorado at http://www.usdoj.gov/usao/co/press_releases/2009/July09/7_6_09.html