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Friday, January 26, 2018

Leader of Fraudulent Medical Device Scheme Pleads Guilty

Defendant Violated Court Injunctions to Stop Selling Light-Emitting Devices as Treatment for Scores of Medical Disorders

A South Dakota man pleaded guilty today in connection with a scheme to defraud consumers by selling light-emitting devices known as the “QLaser System” as a treatment for more than 200 different diseases and disorders, the Department of Justice announced today. Today’s guilty plea capped a three-year effort by the Justice Department and the U.S. Postal Inspection Service to stop distribution of the fraudulent devices to consumers.

 

Robert “Larry” Lytle, 82, of Rapid City, pleaded guilty in the District of South Dakota to one count of conspiracy to introduce misbranded medical devices into interstate commerce with the intent to defraud and mislead, and one count of criminal contempt. Both the criminal charges and Lytle’s guilty plea were pursuant to a plea agreement. Two of Lytle’s co-conspirators in the scheme, Irina Kossovskaia and Ronald D. Weir, Jr., previously pleaded guilty for their roles in the fraud. The government agreed to dismiss criminal contempt charges against a fourth individual, Fredretta Eason.  

 

According to documents filed with the court, Lytle and his co-conspirators — including Kossovskaia and Weir — marketed and distributed QLaser devices to consumers, many of whom were elderly, across the United States.  The conspirators falsely claimed that the devices could safely and effectively treat a panoply of medical conditions at home, including cancer, emphysema, diabetes, autism, HIV, and heart disease.  Lytle created misleading product labeling designed to create the false impression that scientific evidence supported claims about the QLaser device’s effects. In truth, no published clinical or scientific studies supported the use of QLaser devices to treat the listed or other serious conditions, and the U.S. Food and Drug Administration (FDA) never approved the devices for such uses. To lend credibility to his claims, the potential QLaser purchasers were told “Dr. Lytle” was a “retired” dentist and medical laser expert while omitting the fact that his license to practice dentistry had been permanently revoked for defrauding and materially deceiving consumers.

 

Lytle and his co-conspirators forged ahead with their fraud even after a federal court ordered them to stop selling and refund all QLaser purchasers in a series of 2015 injunctions. In violation of the injunctions, Lytle made false statements to the court and FDA investigators, sent dunning letters to QLaser purchasers rather than pay them court-ordered restitution, smuggled hundreds devices out of South Dakota to upstate New York to prevent their seizure, and received a steady stream of income from continued QLaser sales made by Kossovskaia, Weir, and others.

 

As part of his plea agreement, Lytle admitted that, beginning in 2005, he entered into an agreement with others to market medical devices with false and misleading labeling to defraud consumers, and that he continued to do so in violation of a federal court order. He also acknowledged that he obtained at least $16,669,015 over the course of the scheme.

 

“Victimizing the elderly and those suffering from serious illnesses are among the most detestable of crimes,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division, “and to persist with the QLaser fraud even after being ordered to stop by a federal court is even more abhorrent. The Justice Department is committed to protecting Americans from elder abuse and medical frauds.

 

“Reprehensible scams using ineffective and useless medical implements victimize suffering people who are already burdened with long-term, often crippling ailments and diseases.  The U.S. Postal Inspection Service puts the highest priority on investigating these kinds of crimes and bringing these criminals to justice,” said Dana Carter, the U.S. Postal Inspector in Charge of the Denver Division, which covers multiple states including South Dakota. 

 

U.S. District Judge Karen E. Schreier presided at the plea hearing.  In addition to fines, Lytle faces a maximum statutory sentence of five years’ imprisonment on the conspiracy charge. Congress has not established a maximum sentence for the crime of contempt.  Sentencing has been set for April 20.

 

The U.S. Postal Inspection Service investigated this case.  Trial Attorney Ross S. Goldstein of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Kevin Koliner of the U.S. Attorney’s Office for the District of South Dakota are prosecuting the case. 

 

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the District of South Dakota, visit its website at https://www.justice.gov/usao-sd.

Topic(s): 
Consumer Protection
Elder Justice
Health Care Fraud
Press Release Number: 
18-104
Updated January 29, 2018