TWO SENTENCED IN CONNECTION WITH SALE OF STOLEN MEDICAL DEVICES
Former Employees made more than $1,000,000 Selling Stolen Ultrasound Probes
TUYET NGUYEN, 45, and PHU NGUYEN, 46, both of Woodinville, Washington, were sentenced today in U.S. District Court in Seattle for charges related to dealing in stolen medical devices. TUYET NGUYEN was convicted by a federal jury on April 5, 2006, of Conspiracy to Transport Stolen Medical Devices in Interstate Commerce, 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 pleaded guilty to Conspiracy to Launder Money on October 23, 2006. Chief District Judge Robert S. Lasnik sentenced TUYET NGUYEN to 48 months in prison and three years of supervised release and PHU NGUYEN to 37 months in prison and three years of supervised release. TUYET NGUYEN was ordered to $750,00 in restitution. In addition the couple and Columbia Medical Systems must pay a fine totaling $100,000.
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 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. The testimony and documents at trial showed that a Philips employee stole the probes and 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.
An order of criminal forfeiture was also entered against the NGUYENs and Columbia Medical Systems in the sum of $400,000. Chief Judge Lasnik found that the financial losses associated with the theft and sale of stolen ultrasound equipment was approximately $1,600,000.
At sentencing Chief U.S. District Judge Robert S. Lasnik rejected a defense claim that this was an isolated mistake in judgement. “This was not a one time situation, it was repeated behavior,” Judge Lasnik said. “This was a planned way to undercut a competitor.... It was carried out for purely selfish reasons over a period of time.”
The case was investigated by the Food and Drug Administration (FDA), the Internal Revenue Service - Criminal Investigation 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.
