Olympus Corporation of the Americas, the largest endoscope distributor in the country, recently reached a settlement with the U.S. Justice Department and agreed to pay more than $623 million in fines stemming from kickback fraud. This means that the person who reported the fraud will receive a tidy payment of more than $50 million for bringing the company’s misconduct to the attention of federal authorities.
Kickback Fraud on a Massive Scale
According to federal prosecutors, Olympus illegally paid kickbacks to large hospitals and individual doctors who bought the company’s medical devices. Olympus representatives allegedly admitted that they provided doctors with monetary payments, reimbursements for travels costs, free meals and free endoscopes in exchange for doing business with the company. The Justice Department said that Olympus was able to generate profits in excess of $230 million as a result of its fraud.
Olympus faced both civil and criminal charges stemming from the kickback fraud. Under the terms of the settlement reached with the federal government, the medical device company will pay almost $311 million to resolve civil claims – the largest amount ever paid by a medical device company in connection with a violation of the federal anti-kickback statute. The civil case revolved around the company’s alleged violations of the False Claims Act, which imposes liability on anyone who defrauds a government program. Insurance claims filed by Olympus constituted violations of the False Claims Act because they were reportedly “tainted” by the underlying illegal kickbacks.
In addition to paying the massive civil fines, Olympus is also going to have to pay more than $312 million in criminal penalties. However, a deferred prosecution agreement will allow the company to avoid being officially convicted so long as it adheres to certain requirements.
After the penalties were announced by the Justice Department, Olympus issued a public statement. Nacho Abia, the company’s CEO, said that he and other company representatives acknowledge their “responsibility for the past conduct.”
Significant Financial Reward for Qui Tam Whistleblower
The whistleblower in the case was John Slowik, a former chief compliance officer for Olympus. Slowik came forward with the allegations of kickback fraud and was ultimately rewarded with approximately $51 million. That’s because the federal government provides whistleblowers in False Claims Act cases with a portion of the money that is ultimately recovered.
For additional information about this case, view the ModernHealthcare.com article, “Endoscope Maker Olympus Will Pay Record $623 Million to Settle Kickback Allegations.”
If you are aware of fraud being perpetrated against the federal government or the state government, you may be entitled to a large financial reward. That’s why it is important for you to speak with a qualified qui tam lawyer today. Contact the experienced whistleblower and qui tam attorneys at Begelman & Orlow, P. C. today to explore your options.