Whistleblower Wins $51M in Medical Device Kickback Case

Ex-compliance officer for Olympus says doctors, administrators got grants, trips
By Jenn Gidman,  Newser Staff
Suggested by Satch1313
Posted Mar 4, 2016 4:08 PM CST
Whistleblower Wins $51M in Medical Device Kickback Case
Olympus admits it was bribing doctors and hospital administrators.   (Shutterstock)

A whistleblower who worked for Olympus Corporation of the Americas for 20 years will receive $51 million from the company after it admitted to a scheme of bribery and kickbacks and agreed Tuesday to pay $646 million in fines, CNNMoney reports. John Slowik was named the company's compliance officer in 2009, but he soon started registering complaints about doctors and hospital administrators receiving grants, costly trips, and other entertainment—which NPR says included spa treatments and hot air balloon rides—to woo them to buy Olympus' medical equipment. He was fired in 2010 and filed a lawsuit against the company, noting his complaints about the equipment (specifically, endoscopes to check out the digestive tract) fell on deaf ears, NBC News reports. Because he filed the suit on behalf of the federal government, which CNN notes was getting ripped off by the scheme, Slowik is entitled under the False Claims Act to part of any recovered money.

Slowik says negative reaction to his complaints came all the way from the top: Per his suit, he says Mark Gumz, who was the Olympus CEO when Slowik was made compliance officer, told him to "try to figure out how to 'work around the rules' so as to 'not impact the business.'" When instead Slowik tried to rein in the bribery and kickbacks he discovered, he says Gumz started to "ostracize and harass" him, to the point where he became physically ill. Such kickbacks and bribes could "improperly influence a provider's judgment about a patient's health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs for everybody," the DoJ's deputy AG says, per CNN. As for the $646 million in total fines Olympus now has to cough up, CNN notes that about half of that is for going against the feds' anti-kickback statute and will be the largest amount ever paid out for violating that law. (A whistleblower recently revealed the "dirtiest secret" in sports.)

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