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Aug 19, 2021 by |

Orange County False Claims Whistleblower Attorney: Manufacturer of Defective Heart Devices Settles False Claims Act Case for $27 Million

ATTORNEY NEWSLETTER

Five-Year-Old Case Settles

Defendant Sold Allegedly Faulty Defibrillators

Manufacture Allegedly Made False Statements To FDA

The submission of fraudulent claims for reimbursement under government healthcare programs such as Medicare, Medicaid, VA and health programs covering government workers like TRICARE, constitute the largest form of fraud against the federal government.  When individuals have information of fraudulent claims for reimbursement from the government, they can bring actions on behalf of the government against the offending corporation under the False Claims Act, 31 U.S.C. §§ 3729 et seq. (FCA). The FCA provides for damages and penalty recoveries to the government from the wrongdoers. The cases brought under the FCA by private persons are called qui tams and can result in a reward for the individual bringing the action (referred to as relators) if the government recovers.  31 U.S.C. § 3730(c).  Various kinds of health care providers may commit this kind of fraud including medical device manufacturers, drug makers, infirmaries, clinics, pharmacies, hospitals, nursing homes, physician groups, diagnostic labs, therapy providers, home health care agencies and others. Relators in whistleblower cases put a lot of time and work in qui tam cases but the reward can be a substantial percentage of whatever the government ultimately recovers.  31 U.S.C. § 3730(d).  Evans Law Firm, Inc. represents whistleblowers in qui tam cases in Orange County and throughout California.  If you have credible information of fraud against the government that may be the basis for a whistleblower or qui tam case, call us today at (415) 441-8669 or toll free at 1-888-50EVANS (888-503-8267).

Recently Settled Defibrillator Case

The U.S, Department of Justice (DOJ) recently announced a settlement of $27 million of an FCA qui tam case[1] against a medical device manufacturer to resolve allegations it had violated the FCA. The case was initially filed in 2016 by an individual whistleblower.  The allegations in the case centered around defendant’s sale of heart devices to medical facilities between 2014 and 2016.  The complaint alleged that the manufacturer knew that these devices were defective prior to selling them. The defective devices were then implanted into patients, including patients on Medicare and TRICARE, thereby causing the federal government to reimburse the costs. The devices at issue were several models of implantable defibrillators commonly used in patients with irregular heartbeats.  These devices serve to prevent cardiac arrest by deploying an electrical shock when the device detects the occurrence of an irregular heartbeat. In 2013, before the sales of these devices began in 2014, defendant allegedly knew that the batteries powering the devices lost their power charge prematurely. The following year, the defendant sought approval from the Food and Drug Administration (“FDA”) to make changes in the device to cure the defect. In seeking approval defendant allegedly lied to the FDA by claiming the known defect had not actually caused serious harm. According to the complaint, however, defendant knew at the time that at least two serious injuries and one death had already occurred. Even after fraudulently gaining FDA approval and making the necessary changes, defendant allegedly continued to sell its stock of defective devices until 2016. In August 2016, the company finally came clean to the FDA, admitting that the defect had occurred 729 times and had resulted in two deaths and 29 other negative events. Then finally, after it already knowingly sold thousands of the defective devices, defendant issued a recall on October 10, 2016. The $27.1 million settlement resolves all allegations of FCA violation for the thousands of defective devices reimbursed by federal funds before the recall date.

How Qui Tam Cases Begin

In the reported case, it was a patient who uncovered the allegedly fraudulent practices of the device maker.  Individuals with original and credible information of false claims, like the patient in this case, begin FCA qui tam cases by filing a complaint under seal in the federal court. At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims.  31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.)  If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1).   If the government declines to intervene, the relator may proceed with the litigation on his or her own.  31 U.S.C. § 3730(c)(3).

Often, the individual with information of fraud against the government is an employee.  If you are an employee with information of fraud, you employer is prohibited from retaliating against you for bringing a FCA qui tam case.  Despite the law’s protection, employers often do retaliate against whistleblowers, but you can fight back.  Your qui tam complaint can include claims that the defendant unlawfully retaliated against you.  31 U.S.C. § 3730(h).  Whether your claims are included in the underlying qui tam or the subject of an independent action for damages, reinstatement, double back pay with interest and all other available relief, we can represent you in pursuing that relief.

Contact Us

If you have information regarding a whistleblower or qui tam case for any kind of healthcare fraud against the government here in Orange County, contact Ingrid M. Evans at (415) 441-8669 or toll free at 1-888-50EVANS (888-503-8267), or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. In addition to False Claims Act cases, Ingrid also handles bank fraud whistleblower cases under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), commodities and futures trading cases under the Commodities Futures Trading Commission Whistleblower Program, securities fraud cases under the Securities and Exchange Commission Whistleblower Program and FINRA Whistleblower Office and offshore tax evasion and other tax fraud cases under the Internal Revenue Service Whistleblower Office. 

[1] Evans Law Firm, Inc. was not involved in the case in any way.

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