Here's an oldie but a goodie from the suture side!
Convictions for Selling Stolen Devices
OCI Undercover Investigation Discloses Stolen Medical Devices
OCI’s Chicago Field Office initiated this investigation of Bruce Newby as a result of information obtained from another case investigated by the New York Field Office of OCI. During the investigation it became known that Newby was involved in the redistribution/reselling of stolen/diverted medical devices. Newby was interested in obtaining stolen/diverted medical devices in order to resell/redistribute to foreign locations for profit.
After OCI’s execution of a search warrant at Newby’s residence, Newby agreed to provide cooperation and assistance in the investigation. As part of his assistance, Newby met with Christopher Lyon and Terrance O’Connor, both ex-Ethicon salesmen. Newby purchased restricted medical devices from both co-conspirators.
On November 01, 2001, Newby was convicted of 18 U.S.C. § 371- Conspiracy; and Title 26 § U.S.C. 70(1)-Filing False Tax Return.
On December 7, 2001, Lyon, accompanied by his attorneys, provided a proffer. Lyon collaborated with Newby in the dealing of stolen medical devices.
The source for the stolen devices was John Goodwin. Lyon also acquired products from conventions he had attended while still employed with Ethicon. After the convention was over, the attending salesman would just “split and divide” the entire product on hand. Lyon also acquired products by removing them from hospitals at their direction and “sometimes forgetting” to credit the hospitals for the removed product. Lyon maintained that, aside from product he had accumulated himself as an Ethicon salesman, Goodwin was his only outside source of product.
On February 12, 2002, OCI obtained a copy of an inventory list that was faxed by Goodwin showing products that Goodwin was going to sell. The value of the products that Goodwin intended to sell to Lyon was approximately $199, 974.00. On the same date, OCI seized the $2,000.00 and executed a search warrant on a storage unit which contained 24 boxes of miscellaneous medical devices. In total, 31 boxes of miscellaneous medical devices were seized.
On May 9, 2002, Newby was sentenced to 180 days of home confinement, 2 years of probation, 200 hours of community service, and ordered to file and pay amended tax returns and penalties (approximately $80,000.00).
On June 10, 2002, Lyon was convicted of violating 18 U.S.C. § 371 - Conspiracy to Violate 21 U.S.C. §§ 331 and 333(a)(2) - Introduction into Interstate Commerce of Misbranded Medical Devices with the Intent to Defraud or Mislead.
On June 10, 2002, O’Connor, the ex-Ethicon salesman and associate of Newby, admitted to completing one transaction with Newby in which O’Connor received approximately $19,500.00. Subsequently, O’Connor executed a pre-trial agreement. As per the agreement, O’Connor would serve 1 year of supervised probation and would re-pay Ethicon the $19,500.00.
On November 12, 2002, Goodwin was convicted of violating 18 U.S.C. § 371 –Conspiracy; 18 U.S.C. § 2314 - Interstate Transportation of Stolen Property, and 21 U.S.C. §§ 331 and 333(a)(2) - Introduction into Interstate Commerce of Misbranded Medical Devices with the Intent to Defraud or Mislead.
On March 13, 2003, Goodwin was sentenced to 18 months incarceration in a federal prison, 24 months of supervised release after his prison term, and ordered to pay $175,000.00 in restitution to Henry Ford Health Care.
On April 22, 2003, Lyon was sentenced to serve 24 months of probation, and ordered to pay $300,000.00 in restitution ($100,000.00 to Ethicon and $200,000.00 to Henry Ford Health Care).
