SEC Charges Former Tyco Execs with Fraud
Tyco International, Pembroke, Bermuda, made headlines once again last month when the US Securities and Exchange Commission (SEC) and the Manhattan district attorney brought criminal and civil charges against three of its former executives on September 12. According to the charges, former CEO L. Dennis Kozlowski, former chief financial officer Mark Swartz, and former chief legal officer Mark Belnick failed to disclose multimillion-dollar low-interest and interest-free company loans.

Allegedly, the executives used the loans for personal expenses, including real estate, then forgave the debt they owed, and never disclosed any of the transactions. The SEC accused the men of securities fraud and will ask for millions of dollars in repayment. In addition, the complaint requests that these men be prohibited from ever serving as officers or directors of a publicly traded company in the future.

This information comes at a time when the climate at Tyco is uncertain, at best. The company, while attempting to restore confidence in its operations, is undergoing major changes in leadership.

The board recently named Edward D. Breen, the president of Motorola, to replace Kozlowski as its chairman and chief executive. Breen fired Swartz almost immediately upon assuming his role. On September 11, Tyco’s board appointed David J. FitzPatrick, from United Technologies Corp, to serve as the new executive vice president and chief financial officer. Also new to the company is William B. Lytton, formerly of International Paper Company, who will serve as executive vice president and general counsel per the announcement from Tyco’s board on September 12.

Tyco’s public relations department did not return phone calls in search of comment; however, sources within Tyco’s health care division said that despite the headlines, Tyco HME industry customers should not be concerned. Day-to-day business activities are continuing just as before.

Mal Mixon

Invacare Responds to Recall Procedure Allegations
When the September 1, 2002, Cleveland Plain Dealer challenged the responsiveness and effectiveness of the recall procedures of Invacare Corp, Elyria, Ohio, A. Malachi Mixon III, its chairman and CEO, decided to point out the facts. In a release to thousands of media outlets, Mixon detailed an extensive series of steps that the company has instated since two customers died when their power wheelchairs caught fire in 1999. The steps included contacting its nearly 6,000 power wheelchair dealers by mail nine times to alert them that the company was recalling all power wheelchairs manufactured from 1988 through June 2000, sending postcards to consumers, and working with dealers to advertise the recall locally.

“Invacare responded appropriately and aggressively to correct problems that came to our attention,” Mixon says. “There have been no serious injuries or deaths reported over the last 3 years; moreover, there are no pending lawsuits related to fires involving Invacare power chairs.”

Bruno Wins ADED Award
The Association for Driver Rehabilitation Specialists (ADED) honored Bruno Independent Living Aids, Oconomowoc, Wis, with its 2002 Commercial Award. The award recognized Bruno as a corporate member of the association that demonstrated outstanding contributions in the field of driver rehabilitation and vehicle modifications for the disabled. Photo: Michael Bruno II (left), president of Bruno Independent Living Aids, and Andrew Bayer, product manager of the automotive lift/TAS™ division.

3i Group and Company Management Buy Paper-Pak
Paper-Pak Products Inc, San Dimas, Calif, a worldwide provider of adult incontinence products, has sold its entire business to its management team led by CEO Michael J. Brown and 3i Group plc, an international private equity group. The new company name will be PaperPak, and it will include all North American manufacturing, sales, and administrative operations, and Sweden-based European operations. The company asserts that the ownership change will allow customers to receive better service due to its divested noncore business, consolidated European operations, strengthened and realigned management, and improved efficiency.

Permobil Picks Government Relations Director
Darren Jernigan joins Permobil as director of government affairs, and he brings with him firsthand knowledge of what it is like to live as a quadriplegic. Jernigan’s 1990 spinal cord injury led him to extensive political experience with disability laws and lobbying. As director of government affairs, his primary responsibilities will include drafting legislation, lobbying state Medicaid offices, addressing Congress, and protecting the interests of the rehabilitation equipment industry.

In other personnel news, Permobil welcomes Darin Lowry as director of customer support.

Trac Medical Announces eCMN Milestone
It was just a click of a mouse, but when John Trapp, MD, of Pulmonary Specialties PC, Lincoln, Neb, digitally signed his first electronic Certificate of Medical Necessity (eCMN) document without paper backup, it was a milestone in the HME industry, says Trac Medical Solutions Inc, Schenectady, NY, a subsidiary of AuthentiDate Holding Corp. Trapp was participating with Trac Medical and American HomePatient Inc in an evaluation of Trac Medical’s CareCert™ Web-based forms processing program. According to Trac Medical, the electronically signed CMN is the first to include a comprehensive, verifiable audit trail that complies with the government’s Medicare program guidelines.