St. Paul company settles whistleblower’s False Claim Act suit

On Behalf of | Aug 3, 2016 | Whistleblower Protection |

It takes a certain amount of courage to blow the whistle on your employer’s illegal actions. However, there are laws that provide whistleblower protection, so employees in Minnesota can step up and expose illegal conduct on the part of their employer. In fact, one example of a whistleblower case shows just how effective whistleblowing can be.

In a recent case, Cardiovascular Systems Inc. (CSI), settled a False Claims Act (FCA) action, which claimed that CSI used an off-label marketing scam and kickbacks to try to increase sales of their medical products. The employee who blew the whistle on these actions in July 2013 may be awarded somewhere from $800,000 to $2.4 million, along with attorneys’ fees, for his role in initiating the complaint. CSI is located in St. Paul, Minnesota.

The whistleblower was employed at CSI as a district sales manager. He began working for the company in 2012. His lawsuit alleged that CSI was giving doctors training programs, which CSI paid all the costs for, in return for the doctors’ agreement to use their products. CSI also reportedly gave the doctors money for fake “Speaker Bureau” services. According to the lawsuit, CSI also traded its products to third parties for referral channel marketing. Moreover, the company reportedly marketed products for medical procedures that were not approved by the U.S. Food and Drug Administration.

In May 2014, the district attorney in another state began an investigation regarding the whistleblower’s allegations. The results of the investigation determined that CSI had violated the FCA by submitting false claims to Medicare, Medicaid and other government health care programs.

Per the settlement agreement, CSI is required to pay $3 million up front. After that, the company will pay $5 million with interest each quarter beginning in January 2017. CSI must also enter into a corporate integrity agreement with a U.S. government agency — the Office of the Inspector General of the U.S. Department of Health and Human Services — lasting for five years.

Employees may be afraid that they will be retaliated against if they report their employer’s illegal actions to the authorities. However, retaliation in these circumstances is illegal. Moreover, the whistleblower, like the one in this example, may receive part of the government’s recovery. It is important to hold employers accountable for their unlawful actions, and whistleblowing is one way to do just that.

Source: Whistleblower News Review, “Kickbacks Cost Cardiovascular Systems $8M in Whistleblower Travis Tham’s FCA Lawsuit,” June 29, 2016