Kafka, Grimm Charged in Gastric Band Scam

Two South Florida residents are facing federal charges for allegedly turning expired gastric banding systems into a cash cow. Peter Lawrence Kafka, 57, of Parkland, Florida, and Gregory Charles Grimm, 45, of Saint Petersburg, Florida, were indicted on December 8, 2016, for a scheme to repackage and sell expired LAP-BAND Adjustable Gastric Banding Systems, ripping off doctors and endangering patients.

The indictment, unsealed by the U.S. Attorney’s Office for the Southern District of Florida, charges Kafka and Grimm with one count of conspiracy to commit wire fraud, three counts of wire fraud, one count of conspiracy under Title 18, and six counts of misbranding medical devices shipped in interstate commerce. The charges stem from a calculated operation that ran from June 2014 to October 15, 2015, during which the duo allegedly altered serial numbers and expiration dates on expired devices to pass them off as safe and viable.

Both men were once Senior Account Executives at Apollo Endosurgery, Inc., a company that manufactures and distributes the LAP-BAND systems. According to the indictment, Kafka used his industry connections to purchase expired or near-expired devices online, then funneled them to Grimm. Grimm allegedly created counterfeit labels with fake serial numbers and expiration dates, effectively laundering the expired medical equipment before sending them back for resale.

Kafka then sold the misbranded devices to local physicians, who believed they were purchasing legitimate, FDA-approved products. The fraud not only violated federal law but also placed unsuspecting patients at risk, as expired medical devices can degrade and cause serious complications during and after surgery.

The investigation was triggered by a referral from Apollo Endosurgery to the FDA’s Office of Criminal Investigations (OCI). Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Justin D. Green, Special Agent in Charge of FDA-OCI’s Miami Field Office, announced the charges. The case is being prosecuted by Assistant U.S. Attorney Joshua S. Rothstein.

An indictment is not a conviction—Kafka and Grimm are presumed innocent unless proven guilty in court. Court documents are available through the U.S. District Court for the Southern District of Florida at www.flsd.uscourts.gov or via PACER at http://pacer.flsd.uscourts.gov.