NEW YORK – Two former executives from Magellan Diagnostics have pleaded guilty to charges related to concealing a defect in the company's lead testing devices, according to the US Attorney's Office for the District of Massachusetts.
Former Chief Operating Officer Hossein Maleknia and former Director of Quality Assurance and Regulatory Affairs Reba Daoust pleaded guilty this week. Maleknia pleaded guilty to two felony counts of introduction of misbranded medical devices into interstate commerce, while Daoust pleaded guilty to one felony count of making false statements.
Maleknia's sentencing is scheduled for June 26 and Daoust's sentencing is scheduled for June 24. Maleknia and Daoust were indicted in 2023, along with former CEO Amy Winslow, who pleaded guilty to one felony count of introduction of misbranded medical devices into interstate commerce earlier this week.
The charges of introduction of misbranded medical devices allow for a sentence of up to three years in prison, up to one year of supervised release, and a fine of up to $250,000. The charge of making false statements allows for a sentence of up to five years in prison, up to three years of supervised release, and a fine of up to $250,000 or twice the gross gain from the offense, whichever is greater.
The executives allegedly misled Magellan customers and the US Food and Drug Administration about a serious malfunction that affected the firm's LeadCare devices when used to test venous blood samples, causing inaccurately low results. They allegedly hid the malfunction and did not tell customers or the FDA about the malfunction until three years after it was discovered.
"These corporate executives knew about a serious flaw in Magellan's lead testing devices that produced inaccurate reporting of lead levels in the blood," Roberto Coviello, special agent in charge at the US Department of Health and Human Services Office of Inspector General, said in a statement. "They chose to conceal that flaw, completely disregarding the well-being of patients, in their corrupt effort to benefit the corporate bottom line."
Magellan is now owned by Meridian Bioscience, which was acquired by Korean firms SD Biosensor and SJL Partners in 2023. Last year, Magellan agreed to pay $42 million and plead guilty to resolve charges related to the malfunction. It also agreed to compensate all patients who were harmed for the financial damages they suffered as a result of the malfunction.
In 2017, Magellan recalled nearly 1.1 million devices after a warning from the FDA. Later that year, the agency issued a warning letter to the company alleging that it violated federal law by marketing "significantly modified versions" of its lead-testing systems without approval or clearance from the agency. The FDA also alleged that Magellan did not submit medical device reports to the agency after becoming aware of customer complaints involving discrepancies in the test results.