Date: March 2, 2020
Philip D. Kuehnl of Pleasant Prairie, Wisconsin, was sentenced in federal court for mail fraud and filing false tax returns.
U.S. District Judge Lynn Adelman sentenced Kuehnl to 14 months in prison and ordered him to pay more than $289,000 in restitution.
During the period from approximately 2005 through April 2011, Kuehnl, who has also used the names Mike Hilton, Phil Kay, and Michael Helton, devised and carried out a scheme to defraud and to obtain money by means of material false and fraudulent pretenses and representations. Using various business names, including Premium Discount Pharmaceutical Services, Scrip Saver, Script Saver, Medico, Medico Alliance, and Medione, Kuehnl illegally marketed and sold medical devices, including devices purporting to be Synvisc, Orthovisc, and Hyalagan, to physicians, medical clinics, and other related businesses in the United States.
Kuehnl falsely represented to his customers that he was associated with the manufacturers and legitimate distributions of these devices. In fact, Kuehnl acquired the devices from unknown sources in Europe and smuggled them into the United States, where he re-packaged and re-labeled the devices to appear to come from domestic sources. During his scheme, Kuehnl sold more than 100,000 devices for more than $5.6 million. At the same time, Kuehnl reported virtually none of this income and paid little or no taxes.
In December 2010, federal agents searched Kuehnl's home in Pleasant Prairie and later interviewed Kuehnl. During that interview, Kuehnl lied repeatedly about his business and concealed the fact that he had a bank account in Hong Kong. Shortly after being interviewed, Kuehnl fled the United States and remained a fugitive until he was arrested in Thailand in 2018. He has been in custody since that time.
Chicago Field Office Special Agent in Charge Kathy Enstrom stated, "Kuehnl's sentencing demonstrates that IRS – Criminal Investigation is committed to working with our law enforcement partners in investigating and prosecuting those who line their pockets using fraudulent business practices and then victimize all taxpayers by continuing their schemes and not paying taxes on their profits."
"Kuehnl's greed led him to sell counterfeit medical devices, cheat on his taxes, and then flee from authorities," said United States Attorney Krueger. "IRS-Criminal Investigation, the FDA, and the prosecutor in this case showed outstanding persistence to ensure Kuehnl faces the consequences of his corruption."
This matter was investigated by Criminal investigation Division of the Internal Revenue and the Office of Criminal Investigations of the Food and Drug Administration and was prosecuted by Assistant United States Attorney Matthew L. Jacobs.