(CHARLOTTE, N.C.)— Texas-based surgical instrument maker ArthroCare Corp. has agreed to pay $30 million and enter into a deferred prosecution agreement, ending a U.S. Department of Justice probe over senior executives’ scheme to defraud the company’s investors.
ArthroCare is represented by Rick Glaser of Parker Poe Adams & Bernstein LLP; Jeff Layne and Ben Koplin of Norton Rose Fulbright; and John E. Kelly of Bass Berry & Sims PLC.
The DOJ filed in Texas federal court as part of the agreement, charging ArthroCare with one count of conspiracy to commit securities fraud and wire fraud. ArthroCare also agreed to an “enhanced” compliance program and to report on it annually to the DOJ, according to prosecutors.
ArthroCare admitted that the executives trumped up revenue by tens of millions of dollars by using a series of sham transactions, according to the DOJ.
Glaser noted the deferred prosecution agreement in this case is for only two years, even though many DPAs run a minimum of three years. Additionally, the DOJ felt the company’s cooperation in the $400 million fraud probe warranted a fine reduced by 48 percent from the low end of the guideline range, an “extraordinary reduction,” Glaser said.
“As part of the team that represented the company, I am pleased with an outcome that reflects the value of cooperation,” Glaser said.
Glaser is a partner in the Litigation Department at Parker Poe and focuses his practice in the areas of white collar criminal defense and internal investigations. He has more than 20 years of experience in grand jury investigations, including major health care fraud, insurance fraud, public corruption, bankruptcy fraud and Securities and Exchange Commission-related cases.
About Parker Poe
Parker Poe Adams & Bernstein LLP has more than 190 lawyers in five offices located in major markets across North Carolina and South Carolina. The Firm provides legal counsel to large commercial and public organizations on litigation, corporate and regulatory matters.