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www.fdanews.com/articles/61128-medtronic-enters-40-million-settlement-over-whistleblower-allegations

MEDTRONIC ENTERS $40 MILLION SETTLEMENT OVER WHISTLEBLOWER ALLEGATIONS

July 24, 2006

The Department of Justice (DOJ) and Medtronic announced July 18 the firm will pay the government $40 million to settle a civil suit alleging that the firm's Sofamor Danek division paid kickbacks to healthcare professionals to induce them to use Medtronic's spinal products.

The case resulted from a whistleblower suit filed in 2003 by former Medtronic senior travel manager Jacqueline Kay Poteet, who arranged trips to conferences for healthcare professionals. She filed her complaint with the U.S. District Court for the Western District of Tennessee.

The government is relying more and more on whistleblower, or qui tam, actions under a section of the Federal Civil False Claims Act (FCA), according to John Bentivoglio, a former associate deputy attorney general and special counsel for healthcare fraud at the DOJ.

The provision allows a private citizen, generally an employee of the relevant company, to:File a suit in the name of the U.S. government charging fraud by government contractors and other entities who receive or use government funds; and Receive between 15 and 25 percent of any monetary damages recovered.

The FCA also contains a provision prohibiting firms from harassing or firing whistleblowers. If a firm does take such action, a whistleblower can sue for wrongful discharge, double back pay and other damages. (http://www.fdanews.com/ddl/33_29/)