Justice Department sues Vegas medical company

Monday, Feb. 18, 2002 | 10:38 a.m.

The Justice Department sued Matrix Biokinetics Inc. of Las Vegas, Company President Peter Beltran and former director Richard Sorgnard, alleging their packaging methods and complaint-handling procedures repeatedly failed to comply with federal Food and Drug Administration regulations.

Matrix, a distributor of a medical device called PRO ElecDT-2 that treats muscle pain and has about 2,500 customers nationwide, was accused by the government of repeatedly failing to maintain records for its packaging and labelling methods, and of failing to properly handle complaints, investigate product failures and train its employees.

The suit said Sorgnard, who pleaded guilty in October 1999 to improperly marketing the device as being "FDA-approved for sale" and was serving a two-year prison sentence until Oct. 6, allegedly "exercised decision-making authority over the manufacturing and distribution of the device, notwithstanding his incarceration."

Sorgnard, who is now on supervised release in Las Vegas, denied the allegation in court papers filed Feb. 8.

Matrix said it paid $150,000 in fines to the Justice Department in 1998 after the company, along with Sorgnard, were accused by the FDA of misbranding the device as "FDA-approved" when references to the FDA in advertisements for medical devices are prohibited.

Beltran said Matrix was sued in January by the Justice Department after he rejected its proposal in October to temporarily shut down the six-employee company until Matrix was in compliance with FDA laws.

"Why should I agree to let the government shut down the company? Our devices are cleared for sale by the FDA," he said. "Although the way the company files information on the devices and the company's standard operating procedures weren't in compliance with FDA procedures, we're now complying and we've never had to recall our devices."