29 June – LAWFUEL – The Law News Network – R. Alexander Acosta, United States Attorney for the Southern District of Florida, and David Bourne, Special Agent in Charge, United States Food & Drug Administration (FDA), Office of Criminal Investigation, Miami Field Office, announced today that defendants, Francis R. Orlando, and Matthew L. Smith, both of Las Vegas, Nevada, were sentenced in Miami federal District Court in separate but related criminal cases involving a conspiracy to transport and sell in interstate commerce various prescription medical devices, valued at $5,000 or more, knowing the devices to have been stolen, converted, or taken by fraud, in violation of Title 18, United States Code, Sections 2314 and 2, and to impede and obstruct the lawful and legitimate functions of the FDA in enforcing the federal laws and regulations applicable to prescription medical devices.
Orlando and Smith received identical sentences from United States District Court Judge Paul Huck. Each was sentenced to five (5) months of imprisonment, followed by five (5) months of home confinement with electronic monitoring. In addition, the Court imposed a criminal fine of $10,000 on each of the defendants and required that they be placed on a period of two (2) years’ supervised release and perform two-hundred (200) hours of community service during each of those years.
According to the separate but similar criminal charges and statements in Court, Orlando and Smith were sales representatives for Ethicon Endosurgery, Inc., a division of Johnson & Johnson, which specialized in the development and distribution of prescription medical devices for use in surgical procedures. Their employment included marketing of the Ethicon devices to medical facilities in the Las Vegas, Nevada area. The FDA, which regulates such devices under the Food, Drug & Cosmetic Act, requires distributors of such devices to provide special instructions and materials with the equipment if a sale is made to other than a licensed professional, because these devices are deemed to have the potential for causing harm if not used by or under the supervision of a licensed physician.
According to the Indictment, from approximately January of 1997 through December of 2000, Smith participated in a conspiracy with Gary Straus, another sales representative in Las Vegas, and an individual named James M. Vogt, who was the principal behind International Surgical Supply, Inc., a front corporation initially operated in Colorado, that later became a Florida registered corporation with its principal place of business located in Miami. Vogt, operating under a variety of business names, solicited sales representatives of Ethicon and other medical device manufacturers through advertisements in trade journals and word of mouth, seeking to purchase medical devices for re-sale. It was part of their separate conspiracies that Smith and Orlando, each in the course of their activities as sales representatives and without the knowledge or authorization of their employer Ethicon, secured control and possession of significant quantities of the prescription medical devices. The devices were acquired through a variety of means, including, inter alia, retaining devices that were manufactured by companies other than Ethicon when medical facilities converted to the use of Ethicon devices; Ethicon manufactured devices recovered from customer facilities when alternative or later model versions were substituted for earlier models; and from direct theft of the devices from the customer facilities with which they and their coconspirators had close business relationships.
According to statements in Court and the charging Information, Smith participated in approximately twelve (12) shipments of medical devices to Vogt, causing a loss exceeding $120,000. During Orlando’s criminal activity, from approximately April 2001 through August 2003, Orlando assumed the same role as a supplier of diverted medical devices to Vogt, also working through Gary Straus. Over the course of Orlando’s activity in the conspiracy, he participated in illegally shipping stolen and diverted medical devices with a value in excess of $185, 000 to Vogt. On June 21, 2005, Straus was sentenced in his own case arising from the same facts and circumstances, and received a prison term of one (1) year and a day and was ordered to forfeit over $1,000,000.
Mr. Acosta commended the investigative efforts of the Special Agents of the United States Food & Drug Administration who conducted the investigation. The cases were prosecuted by the United State Attorney’s Office, Southern District of Florida, Economic & Environmental Crimes Section.
A copy of all press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls . Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on .
