Surgical sales reps plead guilty to fraud charges against Quillen VA Med Center

Published 1:12 pm Friday, January 26, 2024

Eric S. Smith, 54, currently of Bristol, Va., and Landon Chester, 36, currently of Johnson City, Tenn., entered guilty pleas January 25 to conspiracy to commit bribery and honest services wire fraud before the Honorable Clifton L. Corker.
Smith’s sentencing has been set for May 30 at 11 a.m., and Chester’s sentencing has been set for May 30 at 1:30 p.m., in the United States District Court at Greeneville. Smith and Chester both face a term of up to five years in federal prison, $250,000 in fines, and supervised release of three years.
Under their written plea agreements, both must also pay restitution and have agreed to forfeit seized bank accounts totaling over $156,000. As part of written plea agreements, Smith and Chester waived indictment by a Federal Grand Jury and agreed to plead guilty to any information. According to the plea agreements, both Smith and Chester worked as a surgical sales representative for an independent distributor of a nationwide orthopedic company that manufactured replacement joints and products used during surgeries in which those joints were implanted. Both routinely sold products to the James H. Quillen VA Medical Center at Mountain Home.
In June 2018, Chester and Smith formed a separate company and began selling their own acquired inventory to the VA at inflated prices or when not necessary, resulting in losses to the VA in excess of $850,000. Chester and Smith agreed that they conspired and paid cash bribes of more than $80,000 to two VA Medical Center employees (indicted separately) for their agreement to commit, collude, and aid in the fraud against the VA. U.S. Attorney Francis M. Hamilton III of the Eastern District of Tennessee; Kim Lampkins, Special Agent-in-Charge, Mid-Atlantic Field Office, VA Office of the Inspector General; Elisa Pellegrini, Special Agent-in-Charge, GSA Office of the Inspector General, Mid-Atlantic Division; and Donald “Trey” Eakins, Special Agent-in-Charge, Internal Revenue Service – Criminal Investigation, made the announcement.This prosecution is the result of an ongoing investigation by the VA Office of the Inspector General, GSA Office of the Inspector General, and the Internal Revenue Service – Criminal Investigation. Mac D. Heavener III, Assistant United States Attorney, represented the United States.

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