6 April 2005 – LAWFUEL – The Law News Network – Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; and David W. Bourne, Food and Drug Administration (FDA), Office of Criminal Investigations, Miami Field Office, announced today that defendant, Gary L. Straus, of Las Vegas, Nevada, entered a guilty plea before United States District Court Judge Patricia A. Seitz, in Miami, Florida, to a one (1) count Information charging him with conspiracy to transport and sell in interstate commerce various prescription medical devices, knowing the devices to have been stolen, converted, or taken by fraud and to impede and obstruct the lawful and legitimate functions of the FDA in enforcing federal laws and regulations applicable to prescription medical devices, in violation of Title 18, United States Code, Section 371. Straus, pursuant to the terms of the plea agreement, agreed to forfeit $1,043,852.40, which represents the money he personally received in the course of the illegal enterprise.
The defendant’s sentencing hearing is scheduled for June 21, 2005, at 8:30 a.m. before Judge Seitz. The defendant faces a maximum statutory term of imprisonment of five (5) years and a maximum fine of up to the greater of $250,000 or twice the gain or loss from the defendant’s relevant conduct.
According to the criminal charges and court records, Straus was a sales representative for a division of Johnson & Johnson, Ethicon Endosurgery, Inc., a company specializing in the development and distribution of prescription medical devices for use in surgical procedures. His employment included marketing of Ethicon devices to hospitals and other medical facilities in the Las Vegas area.
From approximately January of 1997 through July 2003, Straus participated in a conspiracy with two other sales representatives in Las Vegas, Francis R. Orlando, of Phoenix, Arizona, and Matthew L. Smith, 38, of Las Vegas, and an individual named James M. Vogt, who was the principal behind International Surgical Supply, Inc., a front corporation initially operated in Kittridge, 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 the 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 which they provided to Straus for sale to Vogt. Straus also acquired medical devices himself for sale to Vogt, in the course of his employment with Ethicon. The devices were acquired through a variety of means, including, among others, retaining devices that were manufactured by companies other than Ethicon when medical facilities converted to the use of Ethicon devices; recovering Ethicon manufactured devices from customer facilities when alternative or later model versions were substituted for earlier models; and illegally taking devices from customer facilities.
According to statements made in court and the Information, Straus participated in more than thirty (30) shipments of stolen medical devices to Vogt, resulting in payments of more than $1.8 million, which Straus shared in part with Smith and Orlando.
On March 23, 2005, Orlando and Smith entered guilty pleas before United States District Court Judge Paul C. Huck, in Miami, Florida, to separate charges of conspiring to sell in interstate commerce various prescription medical devices, knowing the devices to have been stolen, converted, or taken by fraud, and to impede and obstruct the lawful and legitimate functions of the FDA in enforcing federal laws and regulations applicable to prescription medical devices, in violation of Title 18, United States Code, Section 371. Their sentencing hearings are scheduled before Judge Huck on June 3, 2005, at 10:50 a.m.
Mr. Jiménez commended the investigative efforts of the Food and Drug Administration. These cases are being prosecuted by Assistant United States Attorney Thomas Watts-Fitzgerald.
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 .