Corporate Crime Case Database
Consistent with the Department’s ongoing commitment to transparency in corporate crime cases, the DOJ launched a new case database. While it is still in the process of being populated, it will eventually contain the significant, relevant cases from each component and U.S. Attorney’s Office, resolved since the beginning of 2023.
United States v. Garden Bay Fisheries, et al.
On April 28, 2023, a court sentenced James and Michael Hermes, along with their company Garden Bay Fisheries, for selling illegally possessed fish in interstate commerce and making and submitting false records in violation of the Lacey Act (16 U.S.C. §§ 3372(d)(2), 3373(d)(2)). All three defendants are jointly and severally responsible for $180,000 in restitution to be paid to the U.S. Fish and Wildlife Service National Fish Hatchery System (with James and Michael Hermes each paying $90,000). All three defendants will pay $8,500 fines. The company will complete a four-year term of probation. James and Michael Hermes will each complete two-year terms of probation to include six-months’ home confinement. The defendants are non-tribal fish wholesalers who sold illegally harvested fish in 2017.
U.S. v. eBay, Inc.
In January 2023, eBay Inc., the global ecommerce company, agreed to pay a $3 million criminal penalty for an August 2019 harassment and intimidation campaign targeting a Massachusetts couple in retaliation for their online coverage of eBay, and for its obstruction of the investigation that followed.
eBay was charged criminally with two counts of stalking through interstate travel, two counts of stalking through electronic communications services, one count of witness tampering and one count of obstruction of justice and has entered into a deferred prosecution agreement. Pursuant to the agreement, eBay admitted to a detailed recitation of all the relevant facts about its conduct and agreed to pay a criminal penalty of $3 million, which is the statutory maximum fine for these six felony offenses. As part of this resolution, eBay will also be required to retain an independent corporate compliance monitor for a period of three years and to make extensive enhancements to its compliance program.
According to eBay’s admissions, between approximately Aug. 5, 2019 and Aug. 23, 2019, Jim Baugh, eBay’s former Senior Director of Safety and Security, and six other members of eBay’s security team targeted the victims for their roles in publishing a newsletter that reported on issues of interest to eBay sellers. Senior executives at eBay were frustrated with the newsletter’s tone and content, and with the comments posted beneath the newsletter’s articles. The harassment campaign arose from communications between those executives and Baugh.
Baugh and his co-conspirators executed a harassment campaign intended to intimidate the victims and to change the content of the newsletter’s reporting. The campaign included sending anonymous and disturbing deliveries to the victims’ home, including a book on surviving the death of a spouse, a bloody pig mask, a fetal pig and a funeral wreath and live insects; sending private Twitter messages and public tweets criticizing the newsletter’s content and threatening to visit the victims in Natick; and traveling to Natick to surveil the victims and install a GPS tracking device on their car. The harassment also featured Craigslist posts inviting the public for sexual encounters at the victims’ home.
The victims spotted the surveillance team and contacted local police. After learning of the Natick Police Department’s investigation, Baugh made false statements to police and internal investigators, and he and his team deleted digital evidence related to the cyberstalking campaign and falsified records intended to throw the police off the trail.
U.S. v. Magellan Diagnostics, Inc.
On May 21, 2024, Magellan Diagnostics, Inc., a medical device company headquartered in Billerica, Mass., agreed to resolve criminal charges relating to its concealment of a device malfunction that produced inaccurately low lead test results for potentially tens of thousands of children and other patients.
As part of the criminal resolution, Magellan will plead guilty to violations of the federal Food, Drug, and Cosmetics Act (FDCA) and pay a $28.1 million fine, $10.9 million in forfeiture, and a minimum of $9.3 million to compensate patient victims. This resolution also includes a deferred prosecution agreement to resolve felony conspiracy fraud charges against the company.
Magellan’s devices – LeadCare Ultra, LeadCare II and LeadCare Plus – detected lead levels and lead poisoning in the blood of children and adults using either venous (i.e., blood draws through the arm) or fingerstick samples. LeadCare II, which was predominantly used to test fingerstick samples, accounted for more than half of all blood lead tests conducted in the United States from 2013 through 2017. LeadCare Plus and LeadCare Ultra were predominantly used to test venous samples.
Magellan admitted that it misled its customers and the federal Food and Drug Administration (FDA) about a serious malfunction that affected its LeadCare Ultra and LeadCare II that could cause inaccurate test results – producing lead tests results that were falsely low. However, after learning about the malfunction, Magellan still released the devices to the market in 2013 without informing customers or the FDA of the malfunction.
By hiding the malfunction and later deceiving customers and the FDA about when the company discovered the malfunction, the nature, extent and frequency of the malfunction, and the risks associated with the malfunction, Magellan caused an estimated tens of thousands of children and other patients to receive inaccurately low lead test results.
The FDA ultimately found that the LeadCare Devices could not accurately test venous samples, leading to a recall of all LeadCare Devices using venous samples and a warning to the public not to use LeadCare Ultra, LeadCare II and LeadCare Plus for venous blood samples because of the malfunction.
Magellan Diagnostics Agrees to Plead Guilty and Pay $42 Million to Resolve Criminal Charges