Boy did I see a bunch of this in my past lifetime.  I used to deal imagewith logistics managers who got so frustrated on orders shipped the last day of the month that were not “real” and then they would have the expense of the return of the products once they were refused, so the logistics department paid for this as well.  All of this activity was done to meet the Wall Street forecasts but all of this comes back to bite eventually.  Sometimes if companies are not doing this the use of “blind” shipments can create more areas of unknowns as well with finding true points of origin.  Back in my days as a sale rep these double route shipments did add a few dollars for meeting quota but never enough to where it really mattered as any kind of a dollar maker for sure. 

More Candy From China – Are “Blind” Bills of Lading adding to the confusion and delay in locating the products for recall?

As a side note, being I used to write code I often ponder how much medical software sometimes gets out there ahead of it’s time with devices too, as you can see that device recalls involving software lead the list and what really goes on to meet those Wall Street forecasts?   Some of it might kill you one day with malfunctions.  Part of this is just the business but folks do anything to meet those forecasts at time.  The distributors in this case were paid to accept shipments to show orders of course and they could return the product, just like I stated above as I used to see this a lot.  The consumer electronics business is good for this stuff too.   Shareholders in this case are reported to have lost more than $400 million.  BD


AUSTIN (CN) - Two former executives of medical device maker Arthrocare were arrested Wednesday and charged with defrauding investors of more than $400 million, federal prosecutors said.

John Raffle, a former senior vice president of strategic business units, and David Applegate, a former senior vice president of ArthroCare's spine division, were arrested Wednesday morning, Raffle in Morristown, N.J., and Applegate in Orange County, Calif.

The indictment, unsealed Wednesday, claims the men and other senior executives and employees inflated ArthroCare's revenue through several of end-of-quarter transactions involving its distributors, from December 2005 to December 2008.

"Raffle, Applegate, and others then allegedly caused ArthroCare to 'park' millions of dollars worth of ArthroCare's medical devices at its distributors at the end of each relevant quarter. ArthroCare would then report these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts."    Shareholders sued Arthrocare and its executives in July 2008, after the company restated its earnings.


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