The U.S. Department of Justice has won convictions of two former executives of ArthroCare Corp. for orchestrating a fraud scheme that led to more than $400 million in losses for the surgical device company’s investors. After a four-week trial, a federal jury in Austin on Monday convicted former ArthroCare CEO Michael Baker and former CFO Michael Gluk of artificially pumping up the company’s sales and revenue from 2005 to 2009.
“Health care companies and pharmaceutical companies seem to be the [DOJ's] priority right now,” says Ellen Podgor, a professor at Stetson University College of Law in Gulfport, Fla., and editor of the White Collar Crime Prof Blog. She says the ArthroCare case fits a pattern of cases where DOJ prosecutors have gone after health care executives, while reaching deferred prosecution and nonprosecution agreements with the corporations.
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