US v. Para Tech Industries et al.

Food & Drug Administration Case: CLOSED 6/03

Most Recent Update 10/02 (See end of document)

9/01 Update:

United States v. Para Tech Industries, Inc., Therasys, Inc., Paul F. Fulk, and Earnie S. Philpot, 00 CR 77 (S.D. Ohio) (Chief Judge Walter Herbert Rice)

On Thursday, December 21, 2000, Para Tech Industries, Inc. ("Para Tech"), and Therasys, Inc. ("Therasys"), pled guilty in Dayton, Ohio, to one felony count of conspiring to defraud the United States Food and Drug Administration ("FDA") of its authority to regulate the distribution of medical devices. The charge to which Para Tech and Therasys pled guilty 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 carpel 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 carpel 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. At the same time, 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 Ernest 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. No sentencing date has yet been set.

Victim Notification and Restitution Begins

On February 2, 2001, a mailing was sent to all doctors and chiropractors who may have purchased, leased, or had refurbished a CTD-Mark I, advising them that they may be entitled to restitution if they meet the following criteria:

1. They purchased, leased, or refurbished a CTD-Mark I device prior to August 12, 1999, for the purpose of treating patients with carpal tunnel syndrome;

and

2. They were not aware that the CTD-Mark I device was not approved or cleared by the FDA for treatment of patients.

To read a copy of the notice, click here.

Accompanying the notice was a form explaining the type(s) of compensation that victims may be entitled to receive. To read this form, click here.

To be eligible for restitution, any doctor or chiropractor who purchased, leased, or had refurbished a CTD-Mark I is required to complete a declaration providing sufficient information to the United States Probation Office such that a determination can be made as to whether the doctor or chiropractor is eligible for restitution. This declaration must be sent to:

by no later than February 16, 2001. To access this declaration, click here.

(This site is in an Adobe Acrobat PDF file which requires the Adobe Acrobat Reader software.  Click here to download the Adobe Acrobat Reader.  It's free.)

If this document needs to be converted to HTML, the Adobe Acrobat site provides conversion forms and plug-ins.

12/01 Update: No change in status.

3/02 Update:

Para Tech CEO Sentenced to One Year in Prison; Para Tech and Therasys Ordered to Pay $211,102.30 in Restitution.

On March 11, 2002, Chief Judge Walter Herbert Rice sentenced Paul F. Fulk to one year in prison and ordered Fulk to pay a $3,000 fine in connection with his efforts to obstruct a 1995 FDA inspection of Para Tech Industries, Inc., and Therasys, Inc. Judge Rice sentenced co-conspirator, Earnie Philpot, to three years' probation, with the first six months on home confinement and further ordered Philpot to pay a $2,000 fine.

Para Tech Industries and Therasys were ordered to pay $211,102.30 in restitution to chiropractors who purchased the CTD-Mark I, believing it had been approved by the FDA for treatment of carpal tunnel syndrome. Although Judge Rice ordered the two corporate defendants to pay restitution, the United States cannot predict when they will actually make such payments.

It should be noted that not all of the chiropractors who filed restitution claims were ultimately found to be eligible for restitution. Due to the circumstances surrounding the case, the only chiropractors who were eligible for restitution were those individuals who purchased CTD-Mark I devices that had been sold by Para Tech or Therasys between February 15, 1995, and August 12, 1999. Many of the CTD-Mark I devices purchased by chiropractors who filed restitution claims were sold by Para Tech or Therasys prior to February 16, 1995; as a result, those chiropractors were not eligible to receive restitution.

In the near future, the United States will be sending letters to all chiropractors who filed restitution claims. These letters either (1) will advise individual chiropractors that the corporate defendants were ordered to pay restitution to them in a given amount, or (2) will explain to the individual chiropractors why they were not eligible to receive restitution.

Any questions about this case may be addressed to:

6/02 Update:

No change in status.

10/02 Update:

All letters to chiropractors, referenced in 3/02 Update, have been sent out.

 

 

CPB HOME PAGE