Three former Spectranetics executives indicted

Former Spectranetics CEO John Schulte and two other former company executives have been indicted by a federal grand jury in Denver on 12 counts, including conspiracy to defraud the federal government, lying to investigations, import violations and other charges.

The grand jury handed down the sealed indictments Thursday, but they were not unsealed and announced until Monday by the U.S. Attorney’s Office and the Food and Drug Administration’s Office of Criminal Investigations.

Indicted were Schulte, 62, of Wellesley, Mass., who resigned as president and CEO of the Colorado Springs-based medical laser manufacturer nearly two years ago; Obinna “Larry” Adhigije, 50, of Encinitas, Calif., who was vice president of business development for Spectranetics; and Trung Pham, 37, of Colorado Springs, who was business development manager.

Hernan Ricaurte, 41, of Ladera Ranch, Calif., a representative for BAC, a Florida company hired by Spectranetics to identify makers of parts for the company’s medical products, also was named in the indictment.

“Today’s indictment sends a clear message that the FDA will investigate these individuals who jeopardize the public health by importing and distributing unapproved and uncleared medical devices to U.S. consumers,” said Patrick J. Holland, special agent in charge of the Kansas City, Mo., field office of FDA’s Office of Criminal Investigations.

Spectranetics on Monday declined to comment. Schulte, Adhigije, Pham and Ricaurte could not be reached for comment.

Schulte was arrested and appeared in federal court Monday in Massachusetts; Adhigije and Pham are expected to appear in federal court Wednesday and Ricaurte is out of the country, the U.S. Attorney’s Office said. All face up to 20 years in prison and fines of up to $250,000.

The four allegedly conspired with each other and others not named in the indictment between January 2004 and October 2008 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,” according to a press release from the U.S. Attorney’s Office and FDA.

The defendants also allegedly imported medical devices by “false declarations regarding the description, value or uses for the devices,” then introduced and delivered for introduction medical devices for use in humans that were adulterated and misbranded because they were not approved or cleared by the FDA, the press release said.

Schulte is charged in all 12 counts. Ricaurte is charged with conspiracy, receiving merchandise brought into the country illegally, two counts of introducing into interstate commerce an adulterated and misbranded medical device identified in the indictment as “FMD Guidewires” and two counts of receiving in interstate commerce the same adulterated and misbranded medical device.

Spectranetics, in a $5 million settlement with the FDA and the U.S. Attorney’s Office in December, disclosed that it negotiated from May 2005 to November 2007 to become a distributor for catheter guidewires made by Future Medical Design Co. Ltd. in Japan. The company said no more than 10 such wires were illegally imported, some by Schulte, and sent to an unnamed doctor in Arkansas and used in patients; some of the wires may not have been properly sterilized.

The indictment details e-mail messages sent between Ricaurte, Schulte and an unnamed FMD official detailing a plan to use two sets of invoices so Spectranetics could import the guidewires as “wire rope samples” worth $180 instead of guidewires for which it paid $21,880.

Adhigije and Pham are each charged with conspiracy, receiving merchandise brought into the country illegally, introducing into interstate commerce an adulterated and misbranded medical device, identified in the indictment as “BMT PTA Balloons,” and receiving in interstate commerce an adulterated and misbranded medical device.

The case stems from a more than 2-year-old federal investigation into allegations that Spectranetics illegally imported and marketed unapproved medical devices. The company, in settlling the charges for $5 million in penalties and forfeitures, also agreed to continued cooperation in the investigation, according to the press release.

The investigation has been under way since at least Sept. 4, 2008, when agents from FDA and Immigrations and Customs Enforcement raided the company’s headquarters seeking information and correspondence. Six weeks after the raid, Schulte, Adhigije and two other executives were ousted in a management shake-up.