District Court rejects Guidant plea deal

by Ben Vernia | April 27th, 2010

District Judge Donovan Frank of the District of Minnesota rejected the plea agreement of Guidant LLC, a subsidiary of Boston Scientific, which was announced on April 5. In a 37-page opinion, Judge Frank criticized the agreement’s lack of probation for Guidant or Boston Scientific, and he rejected the government’s plan to forfeit approximately $42 million, because it failed to provide clear guidance to victims on how to seek individual compensation through remission of the forfeited amounts.

Before reaching that conclusion, however, Judge Frank concluded that persons claiming to have been victimized by Guidant’s conduct were not entitled to restitution, because although the Crime Victim Rights Act provided for restitution to persons “directly and proximately harmed as a result of the commission of a Federal offense,” 18 U.S.C. § 3771(e), the conduct to which the company offered to plead guilty was the failure to report corrective measures to the FDA, and the victims – all persons who had one of the affected defibrillators implanted – were not affected by that reporting failure.

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