Federal prosecutors charged a former executive of ExThera, a California medical-device manufacturer, with concealing from the government the deaths of two cancer patients who were treated with the company’s blood filter.
Dr. Sanja Ilic, ExThera’s former chief regulatory officer, agreed to plead guilty and faces up to three years in prison, the Justice Department said Thursday. Prosecutors also entered into a deferred prosecution agreement with ExThera in which the company admitted that it defrauded and misled the Food and Drug Administration by failing to report the deaths.
The company agreed to pay a criminal penalty of $750,000 that will be earmarked for families of the victims, and to forfeit $5.7 million.
The two patients, David Hudlow of Panama City, Fla., and Kyle Chupp of Orillia, Ontario, died one day apart in April 2024, shortly after returning home from having their blood filtered on the Caribbean island of Antigua. Mr. Hudlow, 55, and Mr. Chupp, 39, were among two dozen patients with late-stage cancer diagnoses whom ExThera lured to Antigua with promises that its blood filter, which the F.D.A. had conditionally approved only for the treatment of Covid-19, could cure them, The New York Times reported last year. Patients were charged $45,000 per treatment session.
The Antigua operation was the brainchild of Alan Quasha, an American billionaire who saw promise in ExThera’s blood filter as a cancer and longevity treatment. His family-owned private equity firm, Quadrant Management, invested in ExThera and created a Caribbean distributor that purchased $10 million worth of filtering devices from the company. Another Quadrant subsidiary employed an Antigua health clinic to administer the treatments.
Dr. Ilic and an ExThera board member close to Mr. Quasha named John Preston promoted the blood filter to cancer patients in the U.S. and Canada as a miraculous breakthrough, The Times reported. Neither Mr. Quasha nor Mr. Preston have been charged, and both men have denied any wrongdoing.
The investigation, which is being led by the New England Strike Force of the Justice Department’s Health Care Fraud Unit, is ongoing, according to two people familiar with the matter.
ExThera, which once had about 50 employees, has been soliciting new investments and is close to filing for Chapter 11 bankruptcy, investment pitch documents obtained by The Times show.
John Carreyrou is an investigative reporter for The New York Times’s business section.
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