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112.

Sample Medical Device Indictment

CHARLES J. STEVENS
United States Attorney

THOMAS J. HOPKINS
Assistant United States Attorney
555 Capitol Mall, 15th Floor
Sacramento, CA 95814
(916) 551-2300

SYDNEY A. MINNERLY
DOUGLAS STEARN
Attorneys
U.S. Department of Justice
P.O. Box 386
Washington, D.C. 20044
(202) 307-0050

THE GRAND JURY CHARGES:

COUNT 1

(CONSPIRACY)

INTRODUCTORY ALLEGATIONS

At all times material to this Indictment:

1. The United States Food and Drug Administration (hereafter "FDA") was the agency responsible for protecting the public by ensuring, among other things, that diagnostic medical devices and biological products (commonly known and hereafter referred to as "diagnostic kits") were safe and effective for their intended uses.

2. By ensuring the effectiveness of diagnostic kits, including kits used to test individuals for the presence of hepatitis and human immunodeficiency virus (HIV), FDA fulfilled its responsibility under the Federal Food, Drug and Cosmetic Act (hereafter "Food and Drug Act"), 21 U.S.C. §§ 301-92, and the Public Health Service Act (hereafter "PHS Act"), 42 U.S.C. § 262, to protect the public from both economic fraud and the misdiagnosis of disease.

3. Under the Food and Drug Act, persons who manufactured, prepared, and processed diagnostic kits, which were medical devices, were required to register with FDA. 21 U.S.C. § 360. Failure to so register constituted a violation of the Food and Drug Act. 21 U.S.C. § 331(p).

4. FDA was responsible for conducting inspections of the facilities of medical device manufacturers to ensure compliance with the Food and Drug Act. 21 U.S.C. § 374.

5. Under the PHS Act, persons who manufactured diagnostic kits, which were biological products intended for sale, were required to possess a license from FDA, and each such product was required to be covered by a valid product license from FDA before the product could be shipped in interstate commerce. 42 U.S.C. § 262(a) and (d). Failure to obtain such establishment and product licenses constituted a violation of the PHS Act. 42 U.S.C. § 262(a).

6. FDA was responsible for conducting inspections of the facilities of biological product manufacturers to ensure compliance with the PHS Act. 42 U.S.C. § 262(c).

7. XXXXX X. XXXX was the president of XYZ CORPORATION (hereafter XYZ), a manufacturer of diagnostic kits [NOTE: names and places changed from original].

8. XYZ's principal place of business was in Faraway, California.

THE CONSPIRACY

9. Beginning in or about September 1992, and continuing until in or about March 1993, the exact dates being unknown to the Grand Jury, within the Eastern District of California and elsewhere, the defendants,

XXXXXX X. XXXX

and other persons known and unknown to the Grand Jury, knowingly and willfully combined, conspired, and agreed to defraud FDA, an agency of the United States, by impairing, impeding and defeating its lawful function of regulating the manufacture and distribution of certain types of diagnostic kits by craft, trickery, deceit, and dishonest means.

10. It was part of the plan and purpose of this conspiracy that XXXXXX X. XXXX and his coconspirators agreed to and did conceal from FDA the fact that XYZ manufactured and sold in interstate commerce certain types of diagnostic kits.

MEANS AND MANNER

11. Among the means and manner whereby the defendants XXXXXX X. XXXX and his coconspirators carried out the objects of the conspiracy were the following:

a. removing from XYZ premises laboratory notebooks documenting the manufacture of diagnostic kits;
b. creating false laboratory notebooks that omitted references to the manufacture of certain types of diagnostic kits; and
c. shipping certain types of diagnostic kits that were falsely described in shipping documents and invoices.
OVERT ACTS

12. In furtherance of the conspiracy and to effect the objects and purposes thereof, the defendants, XXXXXX X. XXXX and his coconspirators committed and caused to be committed the following overt acts, among others, within the Eastern District of California, and elsewhere:

a. On or about September 11, 1992, during an inspection of XYZ by an FDA official, XXXXXX X. XXXX instructed two employees to remove from XYZ's premises laboratory notebooks documenting the manufacture of diagnostic kits.
b. On or about September 11, 1992, during an inspection of XYZ by an FDA official, XXXXXX X. XXXX instructed two employees to create laboratory notebooks that omitted all data and references pertaining to the manufacture of certain types of diagnostic kits.
c. On or about February 5, 1993, XXXXXX X. XXXX convened a "secret meeting" of certain XYZ employees. During that meeting, XXXXX instructed that certain types of diagnostic kits be manufactured and shipped to businesses outside the State of California.
d. On or about February 16, 1993, XXXXXX X. XXXX signed shipping documents describing certain types of diagnostic kits as "medical research reagents."
e. On or about February 16, 1993, XYZ shipped 51 diagnostic kits to a business located in Ukraine.
f. On or about March 10, 1993, XXXXXX X. XXXX brought three boxes of documents, including laboratory notebooks documenting the manufacture by XYZ of diagnostic kits, to a former employee of XYZ
All in violation of Title 18, United States Code, Section 371.

COUNT 2

(FALSE STATEMENT)

1. The allegations of paragraphs 1 through 8 of Count One of this Indictment are incorporated by reference herein.

2. On or about September 11, 1992, within the Eastern District of California, in a matter within the jurisdiction of FDA, an agency of the United States,

XXXXXX X. XXXX

knowingly and willfully cause to be made a false writing and document knowing the same to contain a false statement and entry: that is, XXXXXX X. XXXX instructed Joe Blow, an employee of XYZ, to create a laboratory notebook that omitted all data and references pertaining to the manufacture by XYZ of certain types of diagnostic kits, when in fact during the time period covered by the notebook, XYZ had manufactured those types of diagnostic kits.

All in violation of Title 18, United States Code, Sections 1001 and 2.

COUNT 3

(FALSE STATEMENT)

1. The allegations of paragraphs 1 through 8 of Count One of this Indictment are incorporated by reference herein.

2. On or about September 14, 1992, within the Eastern District of California, in a matter within the jurisdiction of FDA, an agency of the United States,

XXXXXX X. XXXX

knowingly and willfully cause to be made a false writing and document knowing the same to contain a false statement and entry: that is, XXXXXX X. XXXX instructed Mary Moe, an employee of XYZ, to create a laboratory notebook that omitted all data and references pertaining to the manufacture by XYZ of certain types of diagnostic kits, when in fact during the time period covered by the notebook, XYZ had manufactured those types of diagnostic kits.

All in violation of Title 18, United States Code, Sections 1001 and 2.

COUNT 4

(FALSE STATEMENT)

1. The allegations of paragraphs 1 through 8 of Count One of this Indictment are incorporated by reference herein.

2. On or about September 14, 1992, within the Eastern District of California, in a matter within the jurisdiction of FDA, an agency of the United States,

XXXXXX X. XXXX

knowingly and willfully made a false statement and representation to an FDA official: that is, during an administrative inspection by FDA Investigator Lois Lane, XXXXXX X. XXXX stated to Investigator Lane that XYZ had never sold hepatitis diagnostic kits when in fact, as XXXX well knew, XYZ had sold those types of diagnostic kits.

All in violation of Title 18, United States Code, Sections 1001 and 2.

COUNT 5

(OBSTRUCTION)

1. The allegations of paragraphs 1 through 10 of Count One of this Indictment are incorporated by reference herein.

2. On or about September 28, 1992, within the Eastern District of California, XXXXXX X. XXXX did corruptly obstruct and impede the due and proper administration of the law under which a pending proceeding was being had before FDA, an agency of the United States: that is, XXXXXX X. XXXX instructed a XYZ employee to remove from XYZ's premises chemical solutions used in the manufacture of diagnostic kits in order to obstruct and impede an ongoing administrative proceeding by FDA with respect to XYZ.

All in violation of Title 18, United States Code, Sections 1505 and 2.

A TRUE BILL

___________________________ FOREPERSON

___________________________
CHARLES J. STEVENS
United States Attorney

[cited in USAM 4-8.255; Civil Resource Manual 109]