Former J&J Rep Convicted of Medical Device Conspiracy
A former medical device sales representative for Johnson & Johnson was convicted by a Florida federal court jury on seven felony counts of conspiring to transport stolen medical devices in interstate commerce, money laundering, and other charges. The Department of Justice says that the conviction of Kerri Kaley arose out of a Miami-based investigation known as “Miami Device” that has led to convictions in over 20 cases of medical device theft and resulted in forfeitures, fines, and restitution totaling more than $5 million.
According to court records and testimony at trial, from 1995 through 2005, Kaley and other J&J medical device sales reps were involved in securing possession of significant quantities of prescription medical devices from hospitals they serviced for their employer after a Miami-based conspirator solicited sales representatives and other medical device manufacturer employees to purchase the devices for re-sale.
The government says that the devices were often state-of-the-art equipment used for minimally invasive surgery and the suture materials used throughout hospitals. Kaley’s co-conspirators testified that the devices were acquired by theft and fraud from their customer medical facilities, which were all New York non-profit hospitals. As part of the illegal activity, Kaley laundered over $2.2 million in payments through two sham construction corporations and used the funds to pay the co-conspirators, a home mortgage, home renovation expenses, and child care, the department says.
Kaley is scheduled to be sentenced 12/2 and faces up to five years in prison on the co-conspiracy charge, a maximum of up to 10 years on each of the five substantive counts of transporting stolen property, and up to 20 years on the money laundering conviction. She also is subject to fines on each of the seven counts of up to $250,000 per count or twice the intended gain or loss caused by the relevant conduct. She has already agreed to forfeit $500,000 to the United States payable before her sentencing date. Kaley also faces sentencing on an 11/2014 conviction arising in the same matter for obstruction of justice, which carries a potential sentence of 10 years in prison and a fine of $250,000, the government says.