A former St. Jude Medical ($STJ) exec is being charged with stealing hundreds of thousands of dollars from the company for personal expenses and running off with the devicemaker's trade secrets after his position was terminated, a sordid footnote for the company as it forges ahead with new technology and puts the finishing touches on its $3.4 billion deal for heart pump maker Thoratec.
Bryan Szweda, St. Jude's former VP of operations for global manufacturing of structural heart devices, was charged in a Minnesota district court with 5 counts of theft by swindle and one charge of theft of trade secrets, The StarTribune reports. St. Jude and Szweda are staying mum on the charges for now, but a complaint seen by the newspaper sheds light on allegations, which cover a period from March 2012 to July 2014--two months before Szweda was fired from St. Jude.
In a court filing seen by the StarTribune, Ramsey County Sheriff's Office investigator Tony Samec said Szweda billed $117,000 to St. Jude for personal expenses, including $570 for a Maple Grove go-cart racetrack, $17,228 for 2014-2015 basketball season tickets and $1,259 for a strip club.
"During an interview with (St. Jude) management, they were emphatic that there would be no legitimate business reason for going to a strip club," Samec said in the filing, as quoted by the StarTribune. "Had (St. Jude) known the true nature of the expenses, they would not have approved the payments."
Szweda is also facing charges for making off with classified St. Jude documents after the company put him on administrative leave in 2014. The Little Canada, MN-based company discovered that he had put 4,649 work-related files on an external hard drive, including St. Jude's 2014-18 strategic plan, the StarTribune reports. Investigators also found files copied to Szweda's home computer and a second external drive.
Szweda, who now works for St. Jude archrival Edwards Lifesciences ($EW), doesn't exactly have a squeaky-clean track record. Before his stint at St. Jude, he worked at another competing devicemaker, Boston Scientific ($BSX), which asked him to leave for making questionable purchases, according to the criminal complaint seen by the StarTribune. St. Jude was not aware of Szweda's bad dealings when it hired him in August 2009 and handed him a company credit card, the complaint said.
Meanwhile, St. Jude is working hard to catch rivals such as Medtronic ($MDT) and Boston Scientific ($BSX) with new deals and regulatory approvals. In June, the FDA granted the company PMA approval for its Brio Neurostimulator System for Parkinson's, ramping up competition with Medtronic's related device.
Last month, St. Jude moved a step forward in its acquisition of Thoratec after no other companies made bids. The deal will hand give St. Jude access to Thoratec's ventricular assist device and sets the company up "to enter new markets totaling more than $1 billion" that are on track to grow 10% annually, St. Jude CEO Daniel Starks told investors earlier this year. If all goes to plan, the deal is expected to close in Q4 2015.
- read the StarTribune story