DoJ Prosecutors Behaving Like Mafia, Device Exec Says
Department of Justice (DoJ) prosecutors are behaving like Mafia enforcers in their tactics with medical device companies they accuse of “corporate wrongdoing,” according to Minneapolis-based Vascular Solutions CEO Howard Root, who last month was acquitted by a jury of all DoJ felony charges brought against him in an off-label sales and conspiracy to defraud indictment. Unusually, the case was not brought by FDA itself, but by the San Antonio, TX, U.S. Attorney’s Office which had received a $20 million whistleblower complaint from a former Vascular Solutions salesman. It was co-prosecuted in the U.S. District Court for the Western District of Texas by the local U.S. Attorney’s Office and by DoJ Washington, DC, Civil Division’s Consumer Protection Branch trial attorney Timothy Finley, whose branch normally handles FDA cases.
Root says FDA had no issues with the device sales and indeed, its sole witness for the prosecution at trial, CDRH supervisory biologist Neil Ogden, testified in favor the company. Root says the case against him and his company was “maliciously” brought by Finley and by local assistant U.S. Attorney Bud Paulissen, incentivized by new DoJ policy to go after individuals in “corporate wrongdoing” prosecutions. This six-step guidance was issued by deputy attorney general Susan Yates 9/9/2015 to all federal law enforcement agencies and, Root told us, caused Mafia-style tactics to be adopted by some ambitious DoJ prosecutors like Finley and Paulissen.
He described those tactics in a 3/3 Minneapolis Star Tribune commentary piece, in which he said he had offered to meet with the prosecutors and “correct their misinformation, but two days before that scheduled meeting, they called my lawyer and canceled it. And they never would reschedule. So before deciding to bring criminal charges, these prosecutors never heard my side of the story.”
“In conversation with our lawyers,” Root wrote, “they called conflicting statements by witnesses ‘a line of sh*t.’ They referred to one employee as ‘a poor f***er’ who needed to return ‘on bended knee’ to ‘fix’ his testimony. They told a female employee to think about what would happen to her firstborn son if she were indicted because she refused to ‘cooperate. And by ‘fix’ and ‘cooperate,’ I mean retract their prior testimony and support the government’s case.
“Why would prosecutors act this way? The answer is pretty simple. They started with bad information, jumped to a conclusion, and then, in these prosecutors’ own words, they had ‘invested their blood, sweat and tears’ in this case and ‘needed a body’ in return.”
FDA Webview asked Root why he had paid $520,000 to settle a DoJ civil suit in 2014 that alleged his actions had caused false claims to be submitted to the federal government for the same devices. He replied that DoJ’s investigation was costing him that much every quarter and if he went ahead with a court defense he could have ended up paying $2-3 million in legal costs. “Any company facing that would have done the same,” he said.
Root told us that the six-step Yates memo may have further incentivized local U.S. Attorney’s Office lawyers — they already get 3% of all settlements, he said — to investigate and prosecute cases that before the memo might have not have been pursued. For example, Step 6 recommends focusing on “considerations beyond [the] individual’s ability to pay.” In other words, previous policy could bypass the individual to pursue his or her corporation’s deeper pockets instead, or not proceed at all, depending on circumstances.
The seven-page memo lists the six steps as follows: (l) in order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct; (2) criminal and civil corporate investigations should focus on individuals from the inception of the investigation; (3) criminal and civil attorneys handling corporate investigations should be in routine communication with one another; (4) absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation; (5) Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and (6) civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.