Ex-Spectranetics chief found guilty of FDA lies

07 Mar 2012

John Schulte, former CEO of the medical excimer laser specialist, could spend up to five years in jail.

A jury in a Colorado court has found former Spectranetics CEO John Schulte guilty of lying to US Food & Drug Administration (FDA) officers about imports of unauthorized "guide wire" devices that were used in laser-based cardiovascular procedures.

Despite being acquitted of another 11 charges brought against him, Schulte could be sent to jail for up to five years, and faces a fine of up to $250,000. The former executive will be sentenced on May 29.

Spectranetics’ key technology is an excimer laser system that delivers pulsed ultraviolet light to treat diseased arteries through photoablation. Used in conjunction with proprietary optical fiber catheters, the laser pulses break down arterial plaques and scar tissue surrounding cardiac pacemaker leads. The company also claims to provide the only excimer laser system approved for removing pacemaker and defibrillator leads.

Back in 2008, the FDA and US Immigration and Customs Enforcement served Spectranetics with a search warrant issued by the Colorado District Court, related to the promotion and sale of unauthorized catheter guide wires manufactured outside the US.

Charge sheet
In the charge sheet filed subsequently against Schulte in August 2010, the Japanese company “FMD” was highlighted as the guide wire manufacturer in question, whose products were intended to be inserted into blood vessels, in order to help guide the catheters through.

But those guide wires had not been approved by the FDA, which accused the ex-CEO of lying to its special agent Dan Burke. Schulte told Burke that he had not received FMD’s guide wires while in Japan, and did not carry any of the devices on his subsequent return to the US. In fact, claimed the FDA, the ex-CEO had imported FMD guide wires on three separate occasions between July 2005 and June 2007.

Schulte also told Burke that FMD’s guide wires had not been provided for use in patients, when in fact, the FDA said, Schulte was aware that the devices had been implanted in humans. An Arkansas-based medical doctor referred to only as “B.M.” in court documents had carried out clinical evaluation of Spectranetics’ devices.

The court documents stated that in November 2005 two anonymous patients in Arkansas were treated by that same doctor with the imported FMD guide wires, which had not been cleared or approved by the FDA, or even submitted for evaluation.

Acquitted of main charge
Although Schulte was found guilty of lying to the FDA, he was acquitted on all 11 other counts - including the main charge of conspiring to defraud the US, the FDA and the Customs and Border Protection through imports of the FMD guide wires and balloon catheters used in similar procedures.

According to local media reports following his trial, the ex-CEO declared himself “delighted” to have been acquitted on “all significant counts”.

“We will see what we can do to fight the one guilty count,” Schulte was quoted as saying by The Gazette of Colorado Springs, adding: “I don’t believe the jury got that one right. I am very pleased with the outcome.”

Schulte, now based in Boston, was not the only Spectranetics employee caught up in the case. Co-defendant Obinna ‘Larry’ Adighije had reported to Schulte as VP of business development at the firm. Trung Pham, who Adighije supervised, was also charged, along with Hernan Ricaurte from a Florida-based medical device corporation. Ricaurte was contracted by Spectranetics to obtain guide wires from FMD.

Adighije is yet to be tried, while Pham was acquitted on all five counts raised. Ricaurte, who had previously pleaded guilty to a single charge, will be sentenced once all the trials relating to the case are completed.