Olympus Agrees to Huge Whistleblower Settlement to Resolve Anti-Kickback Allegations

Olympus recently agreed to settle allegations that it violated the Anti-Kickback Law and the Foreign Corrupt Practices Act (FCPA) by paying the federal government a total of $640 million. The Justice Department announced that this settlement represents the largest amount any medical device manufacturer has ever paid under the False Claims Act.

Olympus is one of America’s largest distributors of endoscopes and related medical equipment. The allegations against Olympus were first raised in a whistleblower lawsuit brought by the company’s former compliance officer.

The compliance officer believed that Olympus was engaging in conduct that violated the Anti-Kickback Statute by giving doctors money and other benefits in order to encourage the doctors and hospitals to purchase equipment and supplies from Olympus. Specifically, the whistleblower lawsuit alleged that Olympus would send doctors on luxury vacations, buy them lavish meals, and pay them large “speaker fees” and other extra compensation in order to convince them to order Olympus medical devices for their patients. The whistleblower lawsuit claimed these payments and benefits to the doctors created improper financial relationships between the medical device distributor and healthcare providers who are responsible for ordering and purchasing this equipment.

Giving Away Free Stuff and Expensive Meals to Doctors May Be Considered Illegal Kickbacks

Because these medical devices were paid for by Medicare, TRICARE and Medicaid, the meals, vacation trips and “speakers fees” paid to the doctors could be considered improper kickbacks. If a medical device supplier pays kickbacks to doctors and other healthcare providers to push its equipment to Medicare patients, then the supplier can be liable under the False Claims Act for three times the amount of money it made from Medicare plus significant fines.

Many pharmaceutical companies and durable medical equipment suppliers will wine and dine physicians in an attempt to persuade them to use their products. They will also provide free products and services to doctors or other healthcare providers. It is now common for these companies to also reward doctors who purchase their drugs or equipment with compensation for serving as paid company spokespersons.

While some of these benefits are proper and acceptable, many companies cross the line with extra payments and services. The result is a kickback scheme that violates federal law. A good whistleblower lawyer will know which payments are proper, and which payments may serve as the basis for a successful whistleblower complaint.

Internal Complaints Were Ignored by the Company

In the Olympus case, it appears that the compliance officer for Olympus attempted to solve the problem internally but was ignored and ultimately fired. The compliance officer then made a smart decision to contact an experienced whistleblower attorney to help him prepare a lawsuit that the federal government later joined.

After the whistleblower lawsuit was filed, the federal government investigated the case and ultimately agreed to settle the allegations with Olympus for this record-setting amount. Of course, the compliance officer who initially brought the case will receive a significant portion of this settlement.

FCPA Charges Brought When the DOJ Joined the Whistleblower Suit

As a result of the government’s investigation, additional charges were also brought against Olympus for violating the Foreign Corrupt Practices Act. That law prevents companies from paying bribes or kickbacks to individuals in foreign countries in an attempt to expand the company’s business. In this case, Olympus was accused of paying kickbacks in an attempt to increase its share of medical equipment sales in Central and South America.

This case is another example of what happens when an employee of a company attempts to report misconduct internally and is ignored. We have represented several corporate employees who have tried to correct wrongdoing at their company only to be turned away. Fortunately, as this Olympus employee discovered, there is someone who will listen to their complaints – the Department of Justice.

Do You Want to be a Whistleblower?

If you have information that your employer is submitting false claims for healthcare-related expenses to Medicare, TRICARE or Medicaid, or is involved in some type of kickback scheme, then you likely have the information necessary to pursue a successful whistleblower complaint.

The first step in pursuing a whistleblower claim is to contact an experienced whistleblower lawyer. Our firm has been successful in helping whistleblowers recover substantial rewards from the government for reporting fraud and misconduct under the False Claims Act.

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