Grimy Times has learned that Avanos Medical Inc., a U.S.-based multinational medical device corporation, has agreed to pay more than $22 million to resolve a criminal charge relating to the company’s fraudulent misbranding of its MicroCool surgical gowns.
The criminal information filed yesterday in the U.S. District Court for the Northern District of Texas charges Avanos with one count of introducing misbranded surgical gowns into interstate commerce with the intent to defraud and mislead.
According to court filings, Avanos falsely labeled the gowns as providing the highest level of protection against fluid and virus penetration. Under the terms of a deferred prosecution agreement filed with the criminal information, Avanos will pay $22,228,000, composed of a victim compensation payment of $8,939,000, a criminal monetary penalty in the amount of $12,600,000 and a disgorgement payment of $689,000.
The deferred prosecution agreement resolves a criminal investigation into Avanos’s misbranding of its MicroCool surgical gowns under the Federal Food, Drug, and Cosmetic Act (FDCA) and the company’s obstruction of a 2016 for-cause inspection conducted by the U.S. Food and Drug Administration (FDA) into Avanos’s surgical gown business.
“Companies that sell medical products put their customers at risk when they misrepresent the quality of those products,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division.
“Customers of Avanos trusted the company to deliver on the promises it made about the safety of its surgical gowns,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division.
“The last thing health care workers should have to worry about is whether their personal protective equipment lives up to manufacturers’ claims,” said Acting U.S. Attorney Prerak Shah for the Northern District of Texas.
“Medical devices, such as surgical gowns, must have truthful and accurate labeling,” said Assistant Commissioner for Criminal Investigations Catherine A. Hermsen of the FDA.
According to court documents, surgical gowns sold in the United States are subject to regulation by the FDA, which recognizes a system of classification set forth by the American National Standards Institute (ANSI) and the Association for the Advancement of Medical Instrumentation (AAMI) — known as the ANSI/AAMI PB70 standard.
As part of the deferred prosecution agreement, Avanos admitted that between late 2020 and early 2022, the company introduced misbranded surgical gowns into interstate commerce with the intent to defraud and mislead.
Avanos Medical Inc., a U.S.-based multinational medical device corporation, has agreed to pay more than $22 million to resolve a criminal charge relating to the company’s fraudulent misbranding of its MicroCool surgical gowns. The defendant will pay a total of $22,228,000. The exact date of the crime was not specified.
Defendant: Avanos Medical Inc. | Charges: One count of introducing misbranded surgical gowns into interstate commerce with the intent to defraud and mislead | City and State: Dallas, Texas | Date: Undisclosed | Sentence: Avanos will pay $22,228,000 in restitution, penalties, and disgorgement.
Related Federal Cases
Key Facts
- State: Texas
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
ðŸâ€Â’ Get the grimiest stories delivered weekly. Subscribe free →
MORE FEDERAL CRIME NEWS
White Collar CrimeWhite Collar CrimeWhite Collar CrimeWhite Collar Crime