LAWFUEL – US Law News – R. Alexander Acosta, United States Attorney for the Southern District of Florida, and David W. Bourne, Special Agent in Charge, Food and Drug Administration (FDA), Office of Criminal Investigations, Miami Field Office, announced that defendant, ALAN T. SCHMIDT, 44, of Massapequa, New York, was sentenced on January 8, 2007, in a criminal case arising out of a Miami-based FDA investigation named Operation Miami Device.
Schmidt was sentenced before United States District Court Judge William J. Zloch, in Fort Lauderdale, Florida, for his role in a conspiracy to transport and sell in interstate commerce various stolen prescription medical devices, in violation of Title 18, United States Code, Section 371.
Judge Zloch sentenced Schmidt to a period of six months in federal prison, followed by six months of electronically monitored home detention. Schmidt must also complete a period of supervised release of a year and a half after completing the period of home detention. In addition, Schmidt was ordered to forfeit $155,210.00, which represents the amount of personal gain Schmidt received as a result of his participation in the criminal conspiracy.
According to court records and statements at the hearing, from approximately December 1998 through February 2004, Schmidt participated in a conspiracy with other individuals in the New York and South Florida area, who were sales representatives of the medical device manufacturer Ethicon Endo-Surgery, Inc., a subsidiary of Johnson & Johnson. Through their respective employment, Schmidt and his coconspirators acquired significant quantities of medical devices for re-sale, without authorization form Ethicon or the hospitals to which the devices were originally sold. It was part of the conspiracy that Schmidt and other coconspirators would forward the devices to one of the New York area participants, who would consolidate and ship the equipment to a Delray Beach, Florida-based “fence.” The fence would pay 10% to 30% of the market value of the devices to the New York-based “coordinator,” who would divide up the payments among the group, including payments to Schmidt. Schmidt and the other suppliers received their shares in the form of checks drawn on a corporation established as a front by the spouse of the New York coordinator. The conspirators acquired the devices by a variety of means, including as samples ostensibly for business-development, trade-outs of newer models for older devices from customers, and by direct theft from their customer hospitals and surgical facilities.
Mr. Acosta commended the investigative efforts of the Food and Drug Administration. The case was prosecuted by Assistant United States Attorney Thomas Watts-FitzGerald.
A copy of this 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 http://pacer.flsd.uscourts.gov.