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Jul 22, 2022 by |

San Francisco Whistleblower Attorney: Department of Justice Settles Lawsuit Against Spine Device Distributor and its Owners Alleging Illegal Kickbacks to Physicians


Cases Started Eight Years Ago

Series Of Settlements Recovers Millions For Government

Allegations Of Kickback System For Use Of Medial Device

Every year in this country, individuals bring more enforcement efforts against companies defrauding the government than the government itself brings. Sometimes further government actions spring from cases first brought by individuals.  Federal law authorizes private citizens to bring suits against businesses defrauding the government. False Claims Act, (“FCA”), 31 U.S.C. § 3729 et seq.  Much government fraud occurs in the healthcare sector under programs like Medicare and may involve violations of other federal laws like the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, and the Stark Law, 42 U.S.C. § 1395nn. Cases brought by private citizens (referred to in the law as “relators”) are known as “qui tam actions.” Qui tam actions recover billions for the government every year.  The FCA authorizes awards to relators when the government recovers. 31 U.S.C. §3730 (d).  Frequently, relators are current or former employees, representatives or agents of the businesses committing the alleged fraud.  If you have credible information of fraud against the government in violation of the FCA and live in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).

Recent Anti-Kickback Statute Case[1]

The U.S. Department of Justice (DOJ) recently announced that a distributor of spinal implant devices and its owners, and two of their physician-owned distributorships have agreed to pay $1 million to resolve a lawsuit against them alleging that they violated the False Claims Act by paying physicians to use their medical devices in spinal surgeries on their own patients.  

The Justice Department’s lawsuit alleged that the defendants operated physician-owned distributorships (PODs) that, in reality, were vehicles for the payment of kickbacks to induce physicians to use Reliance’s medical devices in their surgeries. The Anti-Kickback Statute prohibits offering or paying anything of value to encourage the referral of items or services covered by federal health care programs. The Justice Department contends that the defendants’ PODs paid physicians based on their referrals, made false statements to health care providers, and terminated physicians who did not refer enough patients. The United States filed this lawsuit in 2014, following several qui tam cases filed by individuals alleging similar violations against related defendants.  This settlement was reached after the first day of trial.  Altogether the government rev=covered over 10.25 million as a result of the qui tam relators’ initial cases.

How A Qui Tam Action Begins

Individuals with original and credible information of false claims, like relators in the reported 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).

Contact Us

If you have credible information of government fraud in San Francisco or elsewhere in California, call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=””></a>.  In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program. 

[1] Evans Law Firm, Inc. was not involved in the case in any way.  The case is captioned United States of America v. Reliance Medical Systems, LLC, et al., No. 14-6979 (C.D. Cal.).  Earlier qui tam cases making similar allegations against related defendants were captioned United States ex rel. Carey Savitch, M.D., and Gary Proffett, M.D. v. Aria Sabit, M.D., Moustapha Abou-Samra, M.D., and Community Memorial Health System, Case No. 13-3363, and United States v. Reliance Medical Systems, Apex Medical Technologies, Kronos Spinal Technologies, Bret Berry, John Hoffman, Adam Pike, and Aria Sabit, M.D.  Evans Law Firm, Inc. was not involved in any of these cases either.

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