News and Press Releases


September 15, 2006

SESS MERKE, 38, formerly of Everett, Washington, was sentenced today to two years in prison, three years of supervised release, and $368,000 in restitution for Conspiracy to Transport Stolen Medical Devices in Interstate Commerce. MERKE was found guilty April 5, 2006, following a jury trial in front of Chief U.S. District Judge Robert S. Lasnik. At sentencing Judge Lasnik said the case is “really all about greed.... (Merke) did it because he could do it, and wanted the extra money.”

A second defendant, TUYET NGUYEN, was also found guilty of the conspiracy and two counts of Interstate Transportation of Medical Devices, three counts of Transporting in Interstate Commerce Misbranded Medical Devices and one count of Conspiracy to Launder Money. TUYET NGUYEN’s husband, Phu Nguyen, and their company, Columbia Medical Systems (CMS) of Lynnwood, Washington, were also charged in the case. However, the attorney for Phu Nguyen and CMS became ill during trial, resulting in a mistrial as to those defendants. A new trial is scheduled for October 23, 2006. TUYET NGUYEN is scheduled to be sentenced November 3, 2006.

The investigation began in September 2000, when Bothell medical equipment manufacturer Philips Medical Systems contacted the Bothell Police Department. Philips, and a company it acquired in 1998, Advance Technologies Laboratories (ATL), design and manufacture ultrasound equipment. An internal investigation had uncovered the theft of ultrasound transducers manufactured by Philips. In May of 2003, the Bothell Police Department contacted the Food and Drug Administration for assistance with the investigation. In 2005, the Internal Revenue Service - Criminal Investigation was brought into the investigation to help “follow the money.”

TUYET NGUYEN and her husband, Phu Nguyen had worked for Philips for more than 14 years when they left in 1998 to form Columbia Medical Systems, Inc. (CMS), a company that sells used medical equipment. SESS MERKE had worked at Philips ten years before leaving the company in September 2000. For the last several years of his employment, MERKE was an inventory manager in charge of several stockrooms of ultrasound equipment. The testimony and documents at trial showed that MERKE filled out false inventory paperwork relating to many ultrasound transducers that were soon thereafter sold by CMS with a different serial number. The testimony at trial included that of another former Philips employee who said he was also recruited to steal ultrasound transducers and sell them to CMS, with the understanding that the serial numbers on the transducers would be changed to keep the theft from being uncovered. Changing these identifying numbers made it very difficult to track the history of the transducers.

At sentencing, Jon Fazekas, National Vice President for Philips, told MERKE he had been “trusted, respected and highly regarded by co-workers and peers.” Violating that trust resulted in a loss of revenue for the company, increased material costs, and increased labor costs.

MERKE apologized for his “poor decisions” and said the mistakes he made will always be with him. Judge Lasnik said, “When a person who has everything in the world going for them and takes more... that’s not good.” Judge Lasnik said the sentence should serve as a warning to others, that there is a price to pay for stealing from an employer.

The case was investigated by the Food and Drug Administration Office of Criminal Investigations (FDA-OCI), the Internal Revenue Service - Criminal Investigation (IRS-CI) and the Bothell Police Department. Assistant United States Attorneys Susan Loitz and Robert Westinghouse prosecuted the case.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, Western District of Washington, at (206) 553-4110.

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