Needham Medtech CEO Charged With Fraud After Blood Test Inaccuracies

NEEDHAM, MA — A Needham woman who is the former CEO of Magellan Diagnostics is one of three who have been charged in connection with concealing a device malfunction that allegedly produced inaccurately low lead test results for tens of thousands of children and other patients, the U.S. Attorney's Office announced in a news release Wednesday.

Officials said Amy Winslow, 51, of Needham Heights, MA, Hossein Maleknia, 64, of Bonita Springs, FL, and Reba Daoust, 66, of Amesbury, MA—the Magellan CEO, COO, and Director of Quality Assurance and Regulatory Affairs, respectively—were charged with conspiracy to commit wire fraud, wire fraud, conspiracy to defraud an agency of the United States, and introduction of misbranded medical devices into interstate commerce with intent to defraud and mislead.

Winslow and Daoust are expected to make an initial appearance in federal court in Boston, and Maleknia in Tampa, on Wednesday, officials said.

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 through a vein in the arm or a finger prick.

Winslow, Maleknia, and Daoust are accused of repeatedly misleading Magellan customers and the FDA about a "serious malfunction that affected Magellan’s LeadCare devices when they were used to test venous blood samples," causing tens of thousands of children and other patients to receive inaccurately low lead test results, officials said in the news release.

“According to the CDC, there is no safe level of lead in the blood. Additionally, young children and pregnant mothers from low-income households living in public housing are the most vulnerable to lead exposure," United States Attorney Rachael S. Rollins said in the news release. "We allege that these defendants deceived customers and the FDA about the reliability of medical tests that detected lead levels. By doing so, we assert that they endangered the health and lives of incredibly vulnerable victims."

Magellan Diagnostics was founded in 1960 and is headquartered in the greater Boston area. The defendants are accused of first learning that a malfunction in their LeadCare Ultra device could cause inaccurate lead test results—specifically, lead test results that were falsely low—during the FDA clearance process in or around June 2013, officials said.

The charges of wire fraud and wire fraud conspiracy as alleged in the indictment provide for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of up to $250,000. The charge of conspiracy to defraud an agency of the United States provides for a sentence of up to five years in prison, up to three years of supervised release and a fine of up to $250,000. The charges of introduction of misbranded medical devices provide for a sentence of up to three years in prison, up to one year of supervised release and a fine of up to $250,000, according to officials.