- Associated Press - Monday, December 8, 2014

NEWARK, N.J. (AP) - A medical device company and its former chief executive have admitted to distributing knee replacement surgery tools using a marketing plan rejected by the Food and Drug Administration.

OtisMed Corp. and 45-year-old Charlie Chi, of San Francisco, pleaded guilty Monday in federal court in New Jersey. The company was fined more than $80 million for the criminal and civil charges for distributing the knee replacement surgery cutting guides. Chi is scheduled to be sentenced on March 18.

Prosecutors say the company sold orthopedic cutting guides used by surgeons during knee replacement surgery using claims that weren’t evaluated by the FDA and were later rejected.

OtisMed was acquired by Michigan’s Stryker Corp. in November 2009. Prosecutors say Stryker was not aware the devices were sold without FDA approval and cooperated with the government’s investigation.

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