Medical Execs Charged With $400 Million Fraud (Courthouse News)
Two former executives of medical device maker Arthrocare were arrested Wednesday and charged with defrauding investors of more than $400 million, federal prosecutors said.
John Raffle, a former senior vice president of strategic business units, and David Applegate, a former senior vice president of ArthroCare's spine division, were arrested Wednesday morning, Raffle in Morristown, N.J., and Applegate in Orange County, Calif.
Both men are charged with conspiracy to commit wire fraud, mail fraud and securities fraud, four counts of wire fraud, eight counts of mail fraud and three counts of securities fraud, the Justice Department said in a statement.
The indictment, unsealed Wednesday, claims the men and other senior executives and employees inflated ArthroCare's revenue through several of end-of-quarter transactions involving its distributors, from December 2005 to December 2008.
"Raffle and Applegate determined the type and amount of product to be shipped to distributors based on ArthroCare's need to meet Wall Street analyst forecasts, rather than distributors' actual orders," the Justice Department said in the statem...
