March 1, 2012
Former Spectranetics Corp. CEO John Schulte was convicted in Denver federal court Thursday of a single count of lying to federal investigators but acquitted of 11 charges of conspiring to defraud the federal government and smuggling unapproved medical devices into the country that allegedly were used on patients.
Schulte, who now lives in the Boston area, resigned as president, CEO and a director of the Colorado Springs-based medical laser manufacturer in 2008, about six weeks after investigators from the U.S. Food and Drug Administration and Customs and Immigration Enforcement raided the company’s headquarters in the InterQuest business park.
Trung Pham, a former business development manager for Spectranetics who also was indicted in the 2010 case, was acquitted on the five charges against him, which included conspiring to defraud the federal government and smuggling unapproved medical devices into the country.
Obinna “Larry” Adighije, former vice president of business development, is to be tried on five charges.
The jury reached the verdicts on the cases for Schulte and Pham after a nearly five-week trial and about a day of deliberations.
“I’m delighted I was acquitted on all significant counts. It makes me very happy,” Schulte said Thursday. “We will see what we can do to fight the one guilty count. I don’t believe the jury got that one right. I am very pleased with the outcome. They charged me with some very significant counts. I always tried to do what was best for Spectranetics.
“What happened in 2008 was a very unfortunate situation. I am glad there was resolution in this case. I remain passionate about Spectranetics technology and am rooting for everyone there every step of the way.”
Guy Childs, chief financial officer of Spectranetics, declined Thursday to comment.
Jeff Dorschner, a spokesman for the U.S. Attorney’s Office in Denver, said Thursday that prosecutors “presented our best and strongest case to the jury. We respect its verdict.” He declined further comment.
Schulte, Pham, Adighije and Hernan Ricuarte, a representative for BAC, a Florida company hired by Spectranetics to identify makers of parts for the company’s products, were indicted by a federal grand jury in 2010 on the 12 counts, which also included violations of U.S. import laws. Ricuarte pleaded guilty in August to a single count of concealing a felony by sending an e-mail message to a Spectranetics employee acknowledging and promoting the use of false invoices for catheter guidewires made by a Japanese company that were not approved for U.S. use.
Schulte faces up to five years in prison and up to $250,000 in fines on the lying to investigators charge; he is scheduled to be sentenced May 29. Ricuarte will be sentenced after all trials are completed; he faces from three months of probation to six months in prison and between $250 and $250,000 in fines.
The indictments resulted from a more than two-year investigation by the U.S. Attorney’s Office, the Food and Drug Administration’s Office of Criminal Investigations and U.S. Customs and Border Protection that into whether Spectranetics illegally imported and marketed unapproved medical devices. The company settled the allegations raised in the investigation in 2009 for $5 million in penalties and forfeitures, in exchange for avoiding prosecution as a company.
Spectranetics also has set aside $8.5 million to pay the legal expenses of Schulte, Pham and Adighije.
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