Financial Crime World

Manufacturers and Medical Providers Face Scrutiny over Allegations of Fraud

In a series of high-profile cases, federal regulators and law enforcement agencies have taken action against major manufacturers and medical providers accused of engaging in fraudulent activities.

Medtronic Inc. Settlement

Medtronic Inc., a leading medical device company, was forced to settle allegations that it promoted its devices for off-label uses, resulting in false claims to the government. The case, U.S. ex rel. Nowak v. Medtronic Inc., highlighted an industry practice of promoting medical devices approved by the FDA for one use but marketed for higher-risk applications.

Pfizer Settlement

Pfizer, a pharmaceutical giant, was also accused of engaging in off-label promotion and marketing of its blockbuster statin drug Lipitor. The case, U.S. ex rel. Polansky v. Pfizer, Inc., was settled after allegations that the company had made false claims to the government.

Medicare Fraud Cases

In addition to these cases, several hospitals were found to have committed Medicare fraud through false claims for “outlier” payments. The case, U.S. ex rel. Kite v. Besler Consult., et al., resulted in a multimillion-dollar award to the whistleblower.

Other companies accused of fraudulent activities include:

  • Center for Diagnostic Imaging, Inc.: alleged to have violated anti-kickback laws through its presentation of false claims to the government
  • Sound Inpatient Physicians, Inc.: found to have engaged in widespread “upcoding” to support healthcare fraud

Importance of Enforcing Anti-Kickback Laws

The importance of enforcing the requirements of the Anti-Kickback Statute cannot be overstated. The statute prohibits individuals and companies from offering or accepting kickbacks for referring patients to healthcare providers or for ordering medical equipment or services. Failure to comply with these regulations can result in significant legal consequences, including fines and penalties.

SEC Actions against Financial Institutions

In addition to these cases, federal regulators have taken action against several financial institutions accused of engaging in fraudulent activities. The Securities and Exchange Commission (SEC) has brought charges against companies such as:

  • MODDHA INTERACTIVE, INC., ET AL.
  • BATS / Direct Edge Stock Exchanges
  • The New York Stock Exchange (NYSE)
  • Grant Thornton
  • Navinder Sarao / Nav Sarao Futures Ltd.
  • Cargill Inc.

These cases highlight the critical importance of enforcing anti-fraud laws and regulations. By taking action against companies that engage in fraudulent activities, regulators can help protect taxpayers and investors from financial losses and promote a fair and transparent market.

Sources