February 2, 2001
Re: US v. Paul F. Fulk, Earnie S. Philpot, Para Tech Industries, Inc., and Therasys, Inc., 3:00 CR 77 (S.D. Ohio) (Rice, C.J.)
We are writing you because we have information suggesting that you may have purchased, leased, or refurbished a CTD-Mark I device that was manufactured by Para Tech Industries, Inc.
The Mandatory Victims Restitution Act of 1996 provides that all identified victims directly and proximately harmed as a result of the commission of the offense(s) in the above-entitled case receive notice of the following information:
On December 21, 2000, in Dayton, Ohio, Para Tech Industries, Inc. ("Para Tech"), and Therasys, Inc. ("Therasys"), pled guilty to conspiring to defraud the United States Food and Drug Administration ("FDA") of its authority to regulate the distribution of medical devices. This charge relates to the companies' distribution of an unapproved medical device known as the CTD-Mark I, which the companies marketed as being a treatment device for carpal tunnel syndrome. At the plea hearing, the companies admitted that from at least December 1994, the owners and officers of Para Tech and Therasys knew that the CTD-Mark I had not received clearance from the FDA, and was not approved to be sold as a treatment device for carpal tunnel syndrome. The companies further admitted that, from at least on or about February 16, 1995, through on or about August 28, 1999, the companies' owners and officers agreed among themselves to deceive the FDA by making false statements regarding Para Tech's continued manufacture, sale, and shipment in interstate commerce of the CTD-Mark I devices.
On the same date, Paul F. Fulk, the Chief Executive Officer of both companies, and Earnie S. Philpot, an officer and director of both companies, pled guilty to a felony count charging them with conspiring to obstruct a pending FDA inspection. At the guilty plea hearing, Paul Fulk and Earnie Philpot admitted that, during an FDA inspection in December 1995, they attempted to conceal from the FDA investigators the fact that both Para Tech and Therasys were marketing and selling CTD-Mark I devices in interstate commerce without FDA approval.
The United States Probation Office has requested that the government obtain information from individuals believed to be victims. The purpose of this request is to aid the Court in identifying the victims entitled to restitution and in determining what amount of restitution should be paid by the defendants to those victims.
You may be entitled to restitution if you meet the following criteria:
1. You purchased, leased, or refurbished a CTD-Mark I device prior to August 12, 1999, for the purpose of treating patients with carpal tunnel syndrome;
2. You were not aware that the CTD-Mark I device was not approved or cleared by the FDA for treatment of patients.
We cannot guarantee that restitution, or any particular amount of restitution, will be awarded to you. That determination will be made by the Court. Moreover, you should be aware that there may not be sufficient funds available to pay victims full restitution.
If you believe that you are entitled to restitution and meet the criteria set forth above, you need to let the United States Probation Office know. With this letter, we are enclosing a complete explanation of the type(s) of compensation you may be entitled to receive. (Explanation of Losses Subject to Restitution). We are also enclosing a declaration (Economic Crime-Individual Victim Impact Statement) that you should complete and forward to the United States Probation Office as soon as possible. This declaration has the same legal effect as an affidavit, but need not be notarized. This declaration should be mailed to:
Ms. Margarette R. Foster
United States Probation Office
200 West 2nd Street
Dayton, OH 45402
(937) 225-2755 (facsimile)
You should also include all underlying documents you have to support your claim of restitution.
In order for Ms. Foster to process all of the information, she must receive the completed declaration by no later than February 16, 2001. Please feel free to fax your response to Ms. Foster at 927-225-2755. Ms. Foster will submit the declaration on your behalf to the sentencing Court.
At this time, no sentencing date has been set. Periodic updates with respect to this and other information will be posted at a website sponsored by the Department of Justice. You can access this website at:
If you are still in possession of a CTD-Mark I device, you should be aware that the FDA has never approved the CTD-Mark I for treatment of carpal tunnel syndrome. However, on August 12, 1999, the FDA approved the CTD-Mark I as a device to perform traction and mobilization of the cervical muscles and vertebrae. FDA's approval of the CTD Mark I as a cervical traction device is for clinical use only by the prescription of a licensed physician. Should you have any additional questions relating to the regulatory status of the CTD-Mark I, please contact Harold P. Pellerite, Assistant to the Director, Office of Compliance, Center for Devices and Radiological Health, FDA, at (301) 594-4692.
We thank you for your assistance.
James E. Arnold
Consumer Protection Branch
U.S. Department of Justice
Washington, DC 20530
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