The plaintiff in a $25 million lawsuit against a medical device company drew a 15-month sentence after admitting to lying on the stand during the trial, federal prosecutors said yesterday.
David Hernon pleaded guilty in late 2015 to “making false declarations before the court” when he and a business partner named Albert Davis sued Korean MRI scanner maker Isol Technology. Hernon and Davis, partners in a company called LBDS Holding Co., brought claims for breach of contract, trade secret misappropriation and unfair competition against Isol.
But according to prosecutors in the Eastern Texas district, during the 2014 trial Hernon and Davis “testified falsely about business dealings with Cerner (NSDQ:CERN) and offered false exhibits to support LBDS’s claim for damages” on the way to winning a $25 million verdict. After the perjury was discovered, the Eastern Texas court vacated the verdict and awarded Isol some $740,000 to recoup legal costs, according to the prosecutors.
Both men were charged in that district for making false declarations; Davis’s case there is still pending, but both men are already facing years in prison on wire fraud charges in a related case in the Western Missouri district. Three other defendants also drew lengthy sentences for their parts in the scheme, the prosecutors said.
“From Aug. 25, 2008 to Feb. 19, 2015, Davis and his co-conspirators engaged in a scheme to use Cerner Corp.’s reputation and standing in the medical field to manipulate business transactions and court proceedings in their favor,” according to the prosecutors. Davis drew a 12-year sentence in that case and was ordered to pay $19.2 million in restitution to the victims of the fraud; Hernon’s sentence was 4⅓ years and restitution of $6.5 million, they said.