Conviction stands for ex-ArthroCare CEO Baker in $750m fraud case

A federal judge Texas this week upheld the conviction of former ArthroCare CEO Michael Baker on eight counts of wire fraud, rejecting his argument citing a recent U.S. Supreme Court case. Baker and ex-ArthroCare CFO Michael Gluk were convicted in June 2014 on charges that they ran a scheme to generate false revenue numbers by dumping inventory, first with a distributor called DiscoCare and eventually via free shipments to end-users. ArthroCare was DiscoCare’s only client until it acquired DiscoCare in December 2007. Although Baker was sentenced to 20 years in prison and Gluk drew a 10-year term, the U.S. Court of Appeals for the 5th Circuit overturned the convictions in January 2016 and ordered new trials. Gluk then pleaded guilty to a single count of conspiracy to commit wire fraud and securities fraud. Baker’s second trial, which began in late July, ended August 18 when the jury in the U.S. District Court for Western Texas convicted him on 12 of 15 counts, according to court documents. The jury found Baker guilty of one count of wire & securities fraud; seven counts of wire fraud; two counts of securities fraud; and two counts of false statements. Baker was found not guilty on two of the wire fraud counts and one count of the false statement charges, according to the documents. Baker moved to have the wire fraud charges tossed based on the Supreme Court case Honeycutt v. United States, which states that to “obtain property” from a victim, a defe...
Source: Mass Device - Category: Medical Devices Authors: Tags: Legal News Wall Street Beat ArthroCare Corp. Source Type: news