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Feds indict former Spectranetics execs

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A federal grand jury indicted Spectranetics Corp.’s (NSDQ:SPNC) former CEO, two other former executives and a consultant on charges stemming from their alleged illegal importation of laser medical devices for a clinical trial.

John Schulte, who resigned as CEO nearly two years ago, former vice president of business development Obinna “Larry” Adhigije, former business development manager Trung Pham and consultant Hernan Ricaurte were indicted Aug. 26 on 12 counts of conspiracy to defraud the federal government, lying to investigations, import violations and other charges. The indictments were unsealed Aug. 31.

Spectranetics paid $5 million and admitted responsibility to avoid federal prosecution late last year. The Colorado Springs-based company, which makes cardiac ablation lasers used to zap arterial plaque, agreed to pony up $4.9 million in civil damages and forfeit $100,000 to settle the case. Spectranetics also agreed to non-prosecution and corporate integrity agreements with the government.

Schulte, 62, of Wellesley, Mass., (who is currently president and CEO of Tewksbury, Mass.-based Mitralign Inc.) was arrested and appeared in federal court in Massachusetts yesterday. He, Adhigije, Pham and Ricaurte face up to 20 years in prison and fines of up to $250,000.

The indictments accuse the men of conspiring to “obstruct and defeat the law function of the FDA and U.S. Customs and Border Protection, specifically the inspecting, taxing, evaluating and clearing of medical devices imported in the United States” between January 2004 and October 2008, according to a press release.

According to the non-prosecution agreement the company signed last year, Spectranetics and some of its officials illegally imported medical laser equipment. The company ran clinical studies that didn’t comply with Food & Drug Administration regulations (the Coronary Graft Results after Atherectomy with Lasers or Coral trial and another trial of its models of its CVX-300 medical laser and CliRpath Turbo laser, Turbo Elite laser ablation and Turbo-Booster laser guide catheters), according to the Justice Dept. The company also promoted products with no FDA clearance, according to the DOJ. False Medicare claims were submitted from 2003 to 2008 as a result, the agency said.

Federal agents raided the company’s headquarters Sept. 4, 2008, according to the Colorado Springs Gazette.

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