In June 2015, Charlie Chi, who was formerly CEO of OtisMed Corporation, was sentenced to two years in prison. His crime? Distributing the company's OtisKnee orthopedic cutting guide after FDA turned the device down for regulatory approval.
According to a U.S. Department of Justice release, the OtisKnee cutting guide started being sold in May 2006 before FDA evaluation. The company submitted a pre-market notification to FDA in October 2008 for approval, but FDA told the company in September 2009 that approval was denied because the device had not been shown to meet safety and effectiveness standards.
At that time, FDA told the company that distributing the OtisKnee before clearance would be illegal. Chi was told by the company's legal team not to keep selling OtisKnee and the board of directors agreed to stop distribution. Chi decided instead to tell employees to ship already-manufactured OtisKnee devices and advised them on ways to cover up the distribution. Approximately 218 OtisKnees were shipped after FDA's decree.
Chi's sentence: Two years in prison, one year of supervised release, and a $75,000 fine
[Image courtesy of STUART MILES/FREEDIGITALPHOTOS.NET]