Former Acclarent Execs Face Fraud charges

The Department of Justice has charged two former Acclarent executives with conspiracy and fraud, citing an alleged off-label marketing scheme for a sinus device, the Relieva Stratus microflow spacer.

The DOJ accused former CEO William Facteau and ex-sales Vice President Patrick Fabian of trying to develop and sell products quickly in an effort to create projected money flow that would bolster Acclarent’s initial public offering or acquisition prospects. In 2010, J&J subsidiary Ethicon bought Acclarent for $785 million.

Despite the FDA’s rejection of Relieva Stratus as a steroid-delivery product, Facteau and Fabian allegedly marketed the device as such, the DOJ claims.

Both were indicted on one count of conspiracy, three counts of securities fraud, four counts of wire fraud and 10 counts of introducing adulterated or misbranded medical devices into interstate commerce. The wire and securities fraud carries a 20-year maximum sentence for each count; the conspiracy count carries a five-year maximum sentence; and each FDCA violation carries a three-year maximum sentence, with supervised release and a $250,000 fine or twice the gross gain.

Facteau made an estimated $30 million and Fabian $4 million from the Ethicon-Acclarent merger, DOJ prosecutors say.

Facteau serves as chairman, president & CEO of EarLens while Fabian is the COO of NxThera — Jason Scott