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Former Endocare Executives Indicted for Fraud

Yes, as much as we wish it weren't true, corporate greed can be found in the medical device industry, too. The former CEO and CFO of Endocare, Inc. (Irvine, CA) have been indicted for their alleged participation in a scheme to fraudulently inflate company revenue, reports the Los Angeles Times. Paul W. Mikus and John V.

Cracchiolo were charged with wire fraud, securities fraud, filing false statements with the SEC, and lying to the company's accountants. The indictment states that the executives in 2001 and 2002 reported false sales and underreported expenses to inflate earnings and show a history of consistent growth. It also says the company issued false public statements that an independent investigation had not uncovered any fraud, when in fact it had. Mikus and Cracchiolo left the company in 2003. They also face civil suits from the SEC. In 2006, the company signed an agreement with the Justice Department shielding it from prosecution in exchange for cooperation with the investigation. Cryocare makes a device that freezes cancerous tissue for the treatment of prostate cancer and other diseases. Its auditors have expressed concern about its ability to stay afloat, though the company says it has access to capital not reflected in its financial statements.

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