DOJ SealDepartment of Justice

United States Attorney John L. Ratcliffe
Eastern District of Texas

FOR IMMEDIATE RELEASE                                               CONTACT:  DAVILYN WALSTON
FRIDAY, JUNE 1, 2007                                                                              PHONE: (409) 839-2538
WWW.USDOJ.GOV/USAO/txe                                                                 CELL: (409) 553-9881


            BEAUMONT, TX – United States Attorney John L. Ratcliffe announced today that a 56-year-old Helena Laboratories employee has been sentenced for his part in a complex mail fraud scheme in the Eastern District of Texas.

PHILIP GUADAGNO, of Vidor, received a 16 month sentence today from United States District Judge Marcia Crone.  Guadagno must serve half his sentence in federal prison and the other half in home confinement.  He was also ordered to pay over $393,000.00 in restitution.

            According to court documents, in 2003, Guadagno discovered a process to dramatically improve or “derivatize” film gels, but did not disclose that discovery to his employer, Helena Labs.  Helena, located in Beaumont, manufactures testing materials for the biotechnical and biopharmaceutical communities.  One of Helena’s principal products, QuickGel, is a film gel that scientists use to secure and analyze blood serum and other DNA samples. 

Guadagno and others concealed the discovery and shipped the improved or “derivatized” material to an independent company in Ohio.  Guadagno then used his position to cause Helena to order the derivatized material from the Ohio company at inflated prices.  The Ohio company repackaged the material received from Guadagno and sent the material and an invoice back to Helena.  After Helena paid the Ohio company for the derivatized material, the Ohio company kicked back most of the money to the Helena employees.

According to additional documents and court testimony, in February 2005, Guadagno sought legal advice from a local attorney.  The attorney agreed to incorporate a consulting company for Guadagno and others, forming a shell company named WindCat, LLC and opening a bank account for WindCat.  Subsequently, the attorney understood that the company was being used as a shell corporation to disguise a kickback scheme.  Thereafter, WindCat submitted invoices to the Ohio company and the Ohio company paid WindCat rather than the individual Helena employees.  WindCat in turn used the funds to purchase real estate in Beaumont and Crystal Beach, Texas and made cash payments to relatives of the Helena employees and others.

Guadagno was named in an Information on November 30, 2006 alleging conspiracy to commit mail fraud and pleaded guilty on December 1, 2006.

This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorneys Arnold Spencer, Malcolm Bales, and Robert L. Rawls.

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