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On December 21, 2000, Para Tech Industries, Inc., and Therasys, Inc., pled guilty in Dayton, Ohio, to one felony count of conspiring to defraud the FDA of its authority to regulate the distribution of medical devices. The case concerned the companies' distribution of an unapproved medical device called the CTD-Mark I, which the companies marketed as effective for treating carpal tunnel syndrome. At the plea hearing, the companies admitted that from at least December 1994, the owners and officers of Para Tech and Therasys knew that the CTD-Mark I had not received clearance from the FDA, and was not approved to be sold as a treatment device for carpel tunnel syndrome. The companies further admitted that for more than four years the companies' owners and officers agreed among themselves to deceive the FDA by making false statements about Para Tech's continued manufacture, sale, and shipment of the device in interstate commerce.
At the same time, Paul F. Fulk, D.C., the chief executive officer of both companies, and Earnie S. Philpot, an officer and director of both companies, pled guilty to a felony count charging them with conspiring to obstruct a pending FDA inspection. At the guilty plea hearing, Fulk and Philpot admitted that during an FDA inspection in December 1995 they attempted to conceal from the FDA investigators the fact that both companies were marketing and selling CTD-Mark I devices in interstate commerce without FDA approval. The total sales of the device to chiropractors between February 1995 through Agust 28, 1999 were about $1.6 million.
In February 2001, a mailing was sent to all chiropractors and other practitioners who may have purchased, leased, or had refurbished a CTD-Mark I, advising them that they may be entitled to restitution if they had aquired the device before August 12, 1999, for the purpose of treating patients with carpal tunnel syndrome and were unaware that it lacked FDA approval for that purpose. Some chiropractic Web sites have falsely claimed that the device was an effective alternative to surgery.
In March 2002, Fulk was sentenced to a year in prison and ordered to pay a $3,000 fine; Philpot was sentenced to three years probation and a $2,000 fine; and Para Tech and Therasys were ordered to pay restitution totaling $211,102.30 to 24 chiropractors who said they had purchased the device with the belief that it was FDA-approved for treating carpal tunner syndrome.