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Table of Contents
FDA Consumer magazine
January-February 2000
Corrections were made to the original printed version, Feb. 16, 2000. Also see the Letter to the Editor by Robert Rosenthal in the May-June 2000 issue of FDA Consumer.
by Larry Thompson
The president and chairman of the board of a medical device company based in Gaithersburg, Md., pleaded guilty early in 1999 to charges that his company imported and sold to hospitals and clinics a device for measuring body fat before FDA approved the device for marketing.
Robert Rosenthal, head of Futrex Inc., was sentenced on April 29, 1999, by U.S. District Judge Deborah K. Chasanow to four months of home detention, 18 months of probation, a $3,000 fine, and a $200 special assessment fee. In addition to the sentence imposed by Judge Chasanow, Rosenthal was ordered to pay a $90,000 fine to the U.S. Customs Service and a $50,000 fine to the U.S. Securities and Exchange Commission (SEC) as a result of civil settlements with those agencies.
Rosenthal's plea followed an investigation by FDA's Office of Criminal Investigations (OCI) initiated after an FBI inquiry into possible investment fraud. FDA ended up looking into reports of unverifiable clinical data and an international conspiracy to smuggle unapproved medical devices into this country.
The FBI brought its concerns about Rosenthal and his company to FDA's attention in March 1996. The FBI had learned about Rosenthal when the SEC reported that he had demonstrated to a group of investors a device he called The Dream Beam, which he hoped to develop into a noninvasive method for measuring blood glucose. He claimed that the device used light to measure blood sugar levels without requiring a drop of blood. Rosenthal was seeking permission to make a public stock offering to raise research funding for his device. The demonstration to the prospective investors showed the device performing as Rosenthal said it would, but the SEC became suspicious when a former Futrex-official-turned-whistle-blower alleged that Rosenthal had rigged the demonstration. The SEC called in the FBI, which referred the problem to FDA.
FDA was not unaware of Rosenthal and his company when the FBI approached the agency. FDA had engaged in discussions with Rosenthal over a medical device application his company had submitted in 1992 for the Model F-5000 and Model F-5000A fat testers. Both devices were manufactured by Kett Electric Laboratories in Tokyo, and Rosenthal wanted to sell them in the United States.
The devices, which FDA has since cleared for marketing, use near-infrared radiation to measure percentage body fat, lean mass, and body water to give an indication of overall leanness or obesity. The device is basically a wand that is aimed at the mid-point of the largest bicep muscle in the arm. The wand then emits wavelengths of infrared light that are selectively absorbed by fat and reflected by lean body mass. The amount of light absorbed correlates to the total body fat.
In a letter acknowledging that it had received the application for these devices, FDA's Center for Devices and Radiological Health told the company that it could not place the device into commercial distribution until FDA cleared it for marketing.
FDA's approval was held up because the agency identified problems with Futrex's application. Richard Williams, the reviewer in CDRH's Office of Device Evaluation, placed the application on hold because the submitted data did not support the company's claims of the devices' accuracy and effectiveness. This finding led to a series of correspondence and meetings over three years as the agency worked with the company to resolve the questions about the data.
During its investigation, OCI received information that the clinical data used to validate the fat tester had been allegedly fabricated. FDA could not confirm this because when FDA asked for the clinical data, the company said that the data were stored on an old computer and could not be retrieved.
Search warrants were executed jointly by FDA's Office of Criminal Investigations, the FBI, and the U.S. Customs Service in March 1997 at Futrex's facility in Maryland. In January 1998, search warrants were also executed at Kett Electric in Japan by the Japanese National Police and the Tokyo Metropolitan Police at the request of, and with assistance from, the agents of OCI, the FBI, and the U.S. Customs service. Evidence recovered in these searches showed that Futrex began to import and sell its fat tester in 1988, even though FDA did not clear it for marketing until December 1995. To keep FDA and U.S. Customs officials from becoming suspicious, Futrex arranged with Kett Electric to ship the devices to the United States as animal and poultry fat testers.
The company adopted this ploy after FDA held up a shipment of fat testers that arrived at the Baltimore-Washington International Airport. An FDA inspector had checked the agency's records to see whether a device application for the fat tester was pending. When he learned that an application was still under review, he held the cargo. FDA later released it when the company said the devices were "fitness instruments" that were not regulated by FDA as medical devices.
In response to this temporary seizure, Rosenthal told Kett Electric to label the machines, the packaging, and the manifests so it appeared as though the devices were intended for use as animal fat testers. In addition, Rosenthal instructed Kett to remove the user manuals that showed how to use the F-5000s to make measurements on humans before shipping the testers to the United States. Rosenthal had Kett Electric send the labeling for the devices as human fat testers separately.
A review of Futrex's records showed that between July 1994 and December 1995, the company imported more than 2,000 human body fat testers falsely described on commercial invoices and import entry documents as animal and poultry fat testers. The total declared value of these products was $678,602. Although the fat testers were labeled for animal use, Futrex sold 11 percent of them to doctors and other medical personnel, records show, amounting to a declared value of $74,646. Evidence seized during the search of Futrex's headquarters in March 1997 included returned warranty cards showing that many of the buyers of the devices intended to use them in testing laboratories at hospitals and clinics.
The search of the company's offices also turned up a marketing memo written by a doctor that explained how to receive medical insurance reimbursement for use of the unapproved device.
The device FDA cleared for marketing is now sold as the Futrex-5000. Although CDRH reviewers were never satisfied with the company's data about accuracy and efficacy, the agency approved the device because, under the law, companies that market a device such as the fat tester have to demonstrate only that their device is substantially similar to one already on the U.S. market before 1976. Futrex was able to demonstrate this. Also, FDA determined that the fat tester did not pose any safety risks.
FDA never pursued Rosenthal on the noninvasive blood glucose monitor, the so-called Dream Beam, because he never attempted to market it in the United States.
Larry Thompson is a member of FDA's public affairs staff.
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