$487 Million Judgment Entered Against Precision Lens and Owner Paul Ehlen for Paying Kickbacks to Doctors in Violation of the False Claims Act
On May 12, 2023, a more than $487 million-dollar judgment was entered against Defendants Cameron-Ehlen Group, Inc. dba Precision Lens and its owner Paul Ehlen for violations of the False Claims Act and Anti-Kickback Statute. The judgment is the largest judgment entered under the False Claims Act.
Mr. Fesenmaier, a former employee of Sightpath Medical (a company that partnered with Precision Lens and Ehlen to provide kickbacks), filed suit against the defendants in November 2013, alleging violations of the False Claims Act (FCA), a law that allows whistleblowers to bring cases in the name of the United States against government contractors charged with fraud. Such cases seek to recover money back to the United States Treasury for false claims made to federal programs, including Medicare. Mr. Fesenmaier alerted the government that the defendants provided kickbacks—such as lavish trips, private flights, tickets to sports events and other entertainment, and discounted Delta SkyMiles—to ophthalmologists in order to induce those physicians to use Precision Lens products in cataract surgeries reimbursed by Medicare.
After presentation of evidence through a seven-week trial, a federal jury found on February 27, 2023 that the United States, through the U.S. Attorney’s Office for the District of Minnesota, and Mr. Fesenmaier proved that Precision Lens and Ehlen were jointly liable for violations of the FCA and Anti-Kickback Statute by paying kickbacks to ophthalmic surgeons to induce their use of the Defendants’ products in cataract surgeries reimbursed by Medicare. The jury found Defendants caused the submission of 64,575 false claims to Medicare, resulting in single damages of $43,694,641. A person or entity found to have violated the False Claims Act is liable to the United States government for a minimum civil penalty of $5,000 per false claim and three times the amount of damages sustained by the Government. In this matter, the amount included $358,445,780 in statutory penalties and an additional $131,083,925.13 in trebled damages, resulting in a total amount of $489,529,705.13, less $2,481,000 in proceeds from a previous settlement with Sightpath Medical.
“Mr. Fesenmaier’s courage and fortitude to bring the defendants’ kickback scheme to light has helped to ensure that patients receive medical care that is in their best interests and that medical decisions are not impacted by the offer or provision of kickbacks. Our firm is honored to represent Mr. Fesenmaier, who took significant personal and professional risk to expose this fraud on the government, which is, in essence, fraud on the taxpayers. When those who work in the healthcare arena don’t play by the government’s rules, we all suffer,” said Morgan Verkamp partner Chandra Napora.
This case exemplifies the strong public-private partnership created by the False Claims Act. Since the filing of this matter in 2013, Mr. Fesenmaier and his counsel have worked to support the government’s prosecution of this case. From the government’s intervention through trial, Mr. Fesenmaier and his counsel litigated as co-counsel with the United States, exactly as envisioned by the False Claims Act. As Morgan Verkamp’s co-founding partner and lead trial counsel Jennifer Verkamp describes, “This working partnership contemplated by the False Claims Act enabled Morgan Verkamp to support the government’s just efforts to recover fraudulently obtained money back to the Treasury. Morgan Verkamp proudly stands with other whistleblower firms in prosecuting these cases on behalf of and alongside the United States.”
The United States was represented by Assistant United States Attorneys Chad Blumenfield, Bahram Samie, and Andy Tweeten, aided by paralegals Darcie Boschee and Laura Kolars.
Mr. Fesenmaier was represented at trial by Jennifer Verkamp, Sonya Rao, and Chandra Napora, with the assistance of Morgan Verkamp attorneys Rick Morgan, Jillian Estes, Nathaniel Smith, and Jonathan Lischak and paralegal Traci Smith. Mr. Fesenmaier was also supported by local counsel Susan Coler of Halunen Law.
The case, filed in the United States District Court for the District of Minnesota, is United States ex rel. Fesenmaier v. The Cameron-Ehlen Group d/b/a Precision Lens and Paul Ehlen, and the case number is 13-03003-WMW-DTS.
The Government’s press release concerning the verdict can be read here.