Former Vice President of Medical Device Company Convicted of Violating Anti-Kickback Law

BOSTON—The former vice president of a medical device company was convicted today in federal court with violating the Anti-Kickback law.

Thomas P. Guerrieri, 51, of Youngstown, Ohio, pleaded guilty in federal court before U.S. District Judge Rya W. Zobel for violating the Anti-Kickback statute. Guerrieri was the former vice president of sales at a medical device company that sold bone growth stimulators. His sentencing is scheduled for July 11, 2012 at 2:30 p.m. He faces up to five years in prison, to be followed by three years of supervised release, a $250,000 fine, and forfeiture.

Had the case proceeded to trial, the government would have proven that Guerrieri facilitated signing up a surgeon in New York to a “consulting” agreement with the company to induce the surgeon to prescribe the company’s bone growth stimulators. The surgeon was paid tens of thousands of dollars by the company, but provided little or no consulting services in return. The surgeon was supposed to document his services in time sheets provided to the company, but for years he did not fill out these forms or provide any legitimate consulting services, even though he was paid every month.

In or about August 2007, the surgeon became concerned about increased government scrutiny of consulting arrangements such as his. The surgeon, Guerrieri, and a territory manager for the company decided to create and backdate time sheets going back to 2006 to make it appear as though the surgeon filled out these forms contemporaneously and performed legitimate consulting services. In addition, at the surgeon’s request, Guerrieri and the territory manager obtained a letter from the company’s general counsel indicating that the surgeon was compliant under his consulting agreement, which was not true. Guerrieri did these things to induce the surgeon to continue to order bone growth stimulators from the company.

In addition, Guerrieri and others executed a scheme to pay Michael Cobb, a Rhode Island physician’s assistant, for each bone growth stimulator ordered by Cobb. The surgeon had delegated to Cobb the choice of which stimulator his patients received. For years, the device company paid Cobb $50-$100 for each stimulator that his surgeon prescribed. In September 2008, the device company issued a policy expressly prohibiting any payments to anyone who works for a surgeon that prescribes the company’s products. Guerrieri and others were concerned that if they could no longer pay Cobb under the new policy, the company might lose Cobb’s business. Thus, Guerrieri and others devised a scheme where Cobb continued to be paid for each order, but the payments were made by a vendor of the device company, making it more difficult to trace the paper trail back to the device company. Cobb is also charged with violating the Anti-Kickback law. His plea hearing is set for April 19, 2012 at 3:15 p.m. before Judge George A. O’Toole, Jr.

United States Attorney Carmen M. Ortiz; Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General Office-Office of Investigations; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation-Boston Field Division; and Leigh-Alistair Barzey, Resident Agent in Charge of the Defense Criminal Investigative Service, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys David Schumacher and Jeremy Sternberg of Ortiz’s Health Care Fraud Unit.