BOSTON (WWLP) – Three former executives of a medical device company are being charged in connection with conspiracy, wire fraud, and FDA violations for a product that allegedly produced inaccurately low lead test results.
According to the Justice Department in Boston, the former CEO, COO, and Director of Quality Assurance and Regulatory Affairs for Magellan Diagnostics, Inc. (Magellan), headquartered in Billerica, have been charged in connection with concealing a device malfunction that allegedly produced inaccurately low lead test results for tens of thousands of children and other patients.
Fifty-one-year-old Amy Winslow of Needham Heights, 66-year-old Reba Daoust of Amesbury, Mass., and 64-year-old Hossein Maleknia of Bonita Springs, Florida were charged with the following:
- Conspiracy to commit wire fraud
- Wire fraud
- Conspiracy to defraud an agency of the United States
- Introduction of misbranded medical devices into interstate commerce with intent to defraud and mislead
Magellan’s devices called LeadCare Ultra, LeadCare II and LeadCare Plus detected lead levels and lead poisoning in the blood of children and adults. LeadCare II, which was predominantly used to test fingerstick samples, accounted for more than half of all blood lead tests conducted in the United States from 2013 through 2017. LeadCare Plus and LeadCare Ultra were predominantly used to test venous samples.
According to the indictment, Winslow, Maleknia and Daoust repeatedly misled Magellan customers and the FDA about a serious malfunction that affected Magellan’s LeadCare devices when they were used to test venous blood samples. Tens of thousands of children and other patients are estimated to have received inaccurately low lead test results.
Winslow’s lawyer, Latham & Watkins Partner BJ Trach, sent 22News the following statement on the charges, “We are extremely disappointed that the government chose to go forward with this misguided prosecution. Amy left Magellan amicably 5 years ago, and was a thoughtful, compassionate, and effective leader there through difficult times for the company. She did not commit any crimes, and this prosecution, inexplicably initiated so many years after the events at issue, should never have been brought. We look forward to Amy having her day in court, and we are confident she will be vindicated.”
If you or a family member believe you received an inaccurate blood lead test result from a LeadCare device between 2013-2017, please complete the questionnaire located on the FBI’s website.
“According to the CDC, there is no safe level of lead in the blood. Additionally, young children and pregnant mothers from low-income households living in public housing are the most vulnerable to lead exposure. We allege that these defendants deceived customers and the FDA about the reliability of medical tests that detected lead levels. By doing so, we assert that they endangered the health and lives of incredibly vulnerable victims,” said United States Attorney Rachael S. Rollins. “This office, along with our other law enforcement partners, will vigorously investigate and prosecute those who put corporate profits before patient health. Here, we allege the personal gain is at the expense of poor people, children, and individuals who are pregnant. We pledge to advocate on these victims’ behalf and hold bad corporate actors accountable.”
“Individuals and companies whose lead testing devices provide inaccurate results can put the health of all patients, and especially vulnerable children, at significant risk,” said Special Agent in Charge Fernando P. McMillan, FDA Office of Criminal Investigations New York Field Office. “We will continue to pursue and bring to justice those who jeopardize the health of patients and the public.”
“Today, we arrested three former senior executives at Magellan Diagnostics for hiding a serious flaw in the lead testing devices the company produced, resulting in inaccurate test results for tens of thousands of children and other patients. We believe these executives knew about this malfunction for years, but failed to come clean to their customers and the FDA about it in order to boost their company’s bottom line,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. “The last thing sick children and their parents should have to worry about is whether diagnostic tests and devices live up to their manufacturer’s claims. This case should make it crystal clear to all companies that do business in Massachusetts, healthcare or otherwise, that they will be brought to justice for misleading consumers with false promises about their products.”
“Concealing the fact that a device is producing inaccurate lead test results to boost profits while knowing that there is no safe level of lead in the blood, as alleged in this case, is a brazen disregard to the health and safety of our program beneficiaries,” said Phillip M. Coyne, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General. “Today’s arrests should serve as strong reminder that we will never tolerate such behavior that puts patients at risk.”
According to court documents, the defendants, in fact, had known about the malfunction before the product release. The defendants notified the FDA about the LeadCare II malfunction in 2016 when Magellan was acquired by Meridian Bioscience, Inc. for $66 million. It is alleged that they only filed an FDA report for LeadCare Ultra after an outside consultant told Magellan that if they did not notify the FDA about the malfunction, the consultant would.
- The charges of wire fraud and wire fraud conspiracy as alleged in the indictment provide for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000.
- The charge of conspiracy to defraud an agency of the United States provides for a sentence of up to five years in prison, up to three years of supervised release and a fine of up to $250,000.
- The charges of introduction of misbranded medical devices provide for a sentence of up to three years in prison, up to one year of supervised release and a fine of up to $250,000.
Winslow and Daoust are scheduled in Boston federal court and Maleknia is scheduled in Tampa federal court Wednesday.