Graves Garrett Greim LLC (GGG) is pleased to announce the U.S. Department of Justice has intervened in and settled a lawsuit the firm filed in the U.S. District Court for the Northern District of Texas. The lawsuit was filed on behalf of a client against a medical device manufacturer and two of the company’s executives for paying illegal kickbacks to spine surgeons in an effort to influence the use of the company’s products.

The settlement agreement requires the company to pay a total of $12 million plus attorney fees to resolve allegations of False Claims Act (FCA) violations.

The firm represented the whistleblower, legally referred to as the “relator” in FCA (a/k/a “Qui Tam”) actions. Per federal law, a significant portion of the civil settlement will be paid to GGG’s client for bringing forth the fraud allegations involving Medicare and other federal payors.

GGG partner Nathan Garrett, who has represented relators and defendants in FCA cases across the nation, has played a prominent role in prosecuting and defending numerous multimillion-dollar federal whistleblower cases over the past 15 years, building off of his experience as a former FBI agent and federal prosecutor and helping establish the firm’s national reputation in this exceptionally complex and unique area of law.

This particular lawsuit centered on improper financial benefits to orthopedic surgeons and neurosurgeons in an effort to induce them to use the company’s spinal implants, devices and other equipment in medical procedures the physicians performed on Medicare beneficiaries over a period of nearly a decade. The improper payments were alleged to include consulting fees, intellectual property acquisition and licensing fees, registry payments and performance shares in the company, as well as travel to a luxury ski resort, all in violation of the federal Anti-Kickback Statute, which prohibits offering or paying anything of value to induce referrals of items or services covered by federally funded programs. The statute is intended to ensure that physician judgment is not compromised by improper financial incentives.

Under the FCA, a private party can file an action on behalf of the United States when the person has actual knowledge of fraud being perpetrated against the United States, to include federal healthcare programs, federal contracting, military acquisitions, and countless other areas involving federal funds.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division (Fraud Section) and the U.S. Attorney’s Office for the Northern District of Texas, with assistance from the Department of Health and Human Services Office of Inspector General.