CEO Who Made False Statements to Federal Investigators Convicted - Conviction Upheld
A recent case involving the CEO of a medical device company underscores the critical importance of being thoroughly prepared in advance of government inspections and interviews. Government investigators often seek to interview or ask questions of employees and executives during both routine and "for cause" inspections or searches.
It is important to understand in advance both the rights and responsibilities the company and individuals have in these situations. Consulting with counsel and having a plan in place in advance of government inspections and interviews is prudent.
In this case, the CEO was convicted of making material false statements to federal investigators during a voluntary
interview he gave at his company headquarters in 2008. The CEO was criminally convicted by a jury, even though shortly after the interview he contacted the federal agents to correct his statements. United States of America v. George John Schulte
, No. 12-1239, 2014 WL 211833, (10th
Cir. Jan. 21, 2014).
Schulte was the CEO of a company located in Colorado Springs, Colo., called Spectranetics. Spectranetics primarily developed, manufactured and marketed laser-based medical devices for use in procedures to remove blockages in heart and peripheral arteries. In the mid- to late-2000s, Spectranetics sought to expand its product line and began negotiations with two international companies to test some new medical devices.
Three former and one current employee of Spectranetics complained to the Food and Drug Administration (FDA) that Spectranetics was providing physicians with medical devices from outside the United States that were not FDA approved. These unapproved medical devices were being used in patients in the United States.
The FDA, responding to the concerns of these former and current employees, arrived unannounced at Spectranetics' offices—with a search warrant. During the search warrant process, Schulte and other key employees agreed to be interviewed by federal agents. It was during this interview that federal investigators believed Schulte was lying and reminded him of his obligations to tell the truth.
After the interview, Schulte claimed that he had refreshed his recollection by reviewing emails and determined some of his statements were not accurate. Schulte retained his own attorney and the day after the interview sent a letter to the government correcting some of his statements. Subsequently, he sent two additional letters correcting other statements. Despite having sent these correction letters to the government after his interview, Schulte was charged and convicted of making false statements under 18 U.S.C. Section 1001: Under federal law, it is a crime to make a knowingly false statement to government investigators.
This case is a good reminder that it may be appropriate to work with legal counsel to educate executives and employees in advance about their rights and responsibilities when being interviewed. An ounce of prevention can be worth a pound of cure.
If you have questions about these or any other healthcare or government investigation matters, please contact Lu Carole West, at firstname.lastname@example.org or 317-236-2277; Myra Selby, at email@example.com
or 317-236-5903; or Sherry Fabina-Abney, firstname.lastname@example.org
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.