3 former execs arrested and charged for marketing faulty lead testing devices
Three former executives of a company that makes machines that test lead levels in humans deliberately concealed a problem with the devices that produced falsely low results for tens of thousands of children, federal prosecutors alleged on Wednesday.
The children, as well as pregnant people and others, faced serious health risks because of the inaccurate test results, prosecutors said.
Amy Winslow, Reba Daoust, and Mohammad Hossein Maleknia — all former executives at Magellan Diagnostics — were charged with conspiracy to commit wire fraud, wire fraud, conspiracy to defraud an agency of the U.S., and introduction of misbranded medical devices into interstate commerce with intent to defraud and mislead, according to the U.S. attorney's office in Boston.
Winslow, 51, of Needham, is the former CEO; Maleknia, 64, of Bonita Springs, Florida, is the former chief operating officer; and Daoust, 66, of Amesbury, is the former director of Quality Assurance and Regulatory Affairs.
"We allege that these defendants deceived customers and the FDA about the reliability of medical tests that detected lead levels," U.S. Attorney Rachael Rollins said in a statement. "By doing so, we assert that they endangered the health and lives of incredibly vulnerable victims."
According to the Centers for Disease Control and Prevention, there is no safe level of lead in the blood, Rollins said.
Children can be exposed to lead through old paint, contaminated dust and drinking water that passes through lead pipes. The metal accumulates in the body, and at high levels, it can damage organs and cause seizures. Even at lower levels, it can harm brain development and lead to attention and behavior problems.
BJ Trach, an attorney for Winslow, called the charges "misguided," characterizing her an effective leader who left the company amicably five years ago.
"She did not commit any crimes, and this prosecution, inexplicably initiated so many years after the events at issue, should never have been brought," he said in a statement. "We look forward to Amy having her day in court, and we are confident she will be vindicated."
An email was left with an attorney for Daoust. No attorney was listed for Maleknia in court records.
The devices in question, marketed under the names LeadCare Ultra, LeadCare II and LeadCare Plus, tested lead levels through blood draws or fingersticks and accounted for more than half of all blood lead tests conducted in the U.S. from 2013 through 2017, according to the U.S. Attorney's Office for the District of Massachusetts.
The three former executives knew of the problem as far back as 2013 but released the products to the market without informing customers or the FDA, prosecutors alleged.
"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 Bonavolonta, head of the FBI's Boston office.
"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," he said.
The FDA issued a recall of the faulty products.
Customers notified only after company was sold
Winslow and Maleknia had a reason to withhold information about Magellan's equipment — a possible sale of the company could be jeopardized if the malfunction were known, prosecutors said. Magellan, based in Billerica, Massachusetts, was acquired by Meridian Bioscience in 2016 for $66 million, and only then did the defendants notify customers and the FDA about the problem, prosecutors said.
Winslow received a bonus of roughly $2 million as a result of the sale, while Maleknia got $448,000, according to the Justice Department.
If found guilty of wire fraud and wire fraud conspiracy, the defendants could face up to 20 years in prison and a possible fine of up to $250,000, prosecutors said. The separate charges for conspiracy to defraud a U.S. agency and misbranded medical devices entail possible jail time of up to 5 and 3 years respectively in addition to fines.
Cincinnati-based Meridian said in a statement Wednesday that it is cooperating with investigators and is in settlement discussions with the Justice Department, noting that the company itself has not been charged. The company's current line of LeadCare products have been cleared by the FDA and remain available for clinical use, the company noted.
Anyone who suspects that they or a family member received an inaccurate blood lead test result from a LeadCare device from 2013-2017 should complete the questionnaire located on the FBI's website at https://www.fbi.gov/MagellanCaseInquiry. Information about the status of the case is located on the U.S. Attorney's Office website https://www.justice.gov/usao-ma/press-highlights.