A medical device company based in suburban Chicago has agreed to pay a $1 million fine following a federal criminal investigation into the sale of misbranded products imported from overseas. Advanced Inventory Management, Inc., located in Mokena, Illinois, admitted to importing medical products from international distributors at lower prices than those available through U.S. distributors.
According to a Statement of Facts filed in the U.S. District Court in Chicago, employees of the company, under the direction of its sole owner and CEO Anthony Iaderosa, used hair dryers to remove labels indicating that the products were only for resale in specific countries and not in the United States. The company then sold these products domestically at significant markups, achieving profit margins between 35% and 50%. Overall, AIM acknowledged profits of approximately $500,000 through this practice.
The investigation involving AIM and Iaderosa is being settled with deferred prosecution agreements. Both admitted that their actions led to the products being misbranded under the U.S. Food, Drug, and Cosmetic Act. They also admitted to concealing these actions from the U.S. Food and Drug Administration and submitting false statements to customs agents.
The U.S. Attorney’s Office has charged AIM and Iaderosa with misbranding a medical device with intent to defraud. Under these agreements, prosecution will be deferred for three years against AIM and one year against Iaderosa. If they comply with certain conditions during this period, including paying a $1 million fine to the Department of Justice and implementing a compliance program to prevent future violations of federal food and drug laws, charges may be dismissed.
Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, along with Ronne Malham from the FDA's Office of Criminal Investigations' Chicago Field Office announced these developments. Assistant U.S. Attorney Jared Hasten represents the government.