Legal Trouble May Be Coming For Osiris' Sales Executives May. 8, 2015 4:02 PM ET | 3 comments | About: Osiris Therapeutics, Inc. (OSIR) Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...) Summary A plea agreement by their former colleagues leads us to believe an Osiris executive is under investigation for alleged kickbacks that took place while he worked for Advance Bio Healing. Program called the "Magic Wand" or "Receipt Maker" to provide gratuities to physicians without being detected. Even if no illegal activity is found at Osiris, it seems likely that the investigation will expand to include Mr. Clawson and Mr. O'Briant. Osiris Therapeutics (NASDAQ: OSIR) is a developer, manufacturer and distributor of regenerative medicine products. Focused on the United States, the company's main products include Grafix, for treating wounds, BIO4, a bone allograft, and Cartiform, a chondral allograft. Products are distributed through the company's salesforce to hospitals, physicians, clinics and other distributors. The market for the products is very competitive with a number of large biologics firms including Zimmer, RTI Biologics, Medtronic and many others with substantial resources to market their products. At Least One of Osiris' Executives May Be Under Investigation for Providing Kickbacks and Fraud In a recent Department of Justice Investigation, two sales persons who worked for Advance Bio Healing (ABH - which was purchased by Shire in 2011 and recently by Organegenisis) signed a plea agreement in July of last year related to paying kickbacks to doctors in order to induce them to use ABH's Dermagraft products. These two individuals, Charles Anthony Ezell and Nicolo Rallo worked in the salesforce and reported to Todd Clawson and Keith O'Briant at ABH. Based on information provided in the plea agreement, it appears they may have been co-conspirators in the kickback scheme. The plea agreements for Ezell and Rallo can be located in court files for the U.S. District Court, Middle District of Florida or you can go to www.pacer.gov and refer case 8:14-cr-00311-RAL-MAP to search for the court files. The inclusion of these two individuals could spell trouble for Osiris given Mr. Clawson's current role as National Director of sales and marketing and close association with Keith O'Briant who was a consultant with the company. Based on the information included in the plea agreement, in late 2009 a co-conspirator worked with management to develop a program called the "Magic Wand" or "Receipt Maker" to provide gratuities to physicians without being detected. Mr. Ezell later created false receipts which he shared with the other conspirators. The plea agreement states that, Mr. Ezell together with others including "KO," "NR," "TC," (who were ABH officers known to the defendant and the government), and members of the ABH sales force, did knowingly and willfully conspire to and did offer and pay physicians and the physicians' staff kickbacks... (click to enlarge)
Just ask RP in Phoenix. Ask him about Maestro's and RF at the VA in Phoenix. Ricky boy was Magic Wanding for years.
No worries, It's not a shady organization, due to our upper managements backgrounds being very far away from wound care. Two of the AVP's, and about 4 of the RSD's who came from Dermagraft/ABH are really the only bad seeds. The other AVP and other RSD's that came from ABH are decent guys, professional and have good character. It's just the West and the East who are really playing a game their not qualified for. Trust me, the more surgical, and other type backgrounds move in, their bad character, practices, and complete ignorance will be unveiled. There are a number of folks now seeing this at Upper HQ, their time is limited. Great company, great product, and great future...just about 6 douchebags that have to go...and then where home free.
