JITENDRA SWARUP PAYS OVER $2,900,000 TO THE UNITED STATES TO RESOLVE FALSE CLAIMS ACT ALLEGATIONS BROUGHT BY RELATOR KIPP FESENMAIER. THE UNITED STATES INTERVENES AGAINST ADDITIONAL DEFENDANTS.
In August 2017, Sightpath Medical and related defendants paid $12 million to resolve federal False Claims Act allegations that Sightpath paid kickbacks to physicians and physician practices to induce the use of its products and services in eye surgeries paid for by the United States. Today, one of the defendant doctors, Jitendra Swarup of North Carolina, paid an additional $2.9 million to resolve allegations that he accepted Sightpath’s kickbacks and subsequently used and recommend its services.
The United States also filed its Complaint-in-Intervention today against two additional Defendants: the Cameron-Ehlen Group, Inc., d/b/a Precision Lens, and its owner, Paul Ehlen, both located in Minnesota. The United States’ Press Release can be found here.
The settlement with Dr. Swarup is the second settlement to partially resolve a qui tam whistleblower case brought by Kipp Fesenmaier, a former Vice President of Operations for Sightpath’s predecessor entity. The case was filed in Minneapolis federal court in November 2013 under the False Claims Act. The case remains pending against Precision Lens and Ehlen.
The False Claims Act encourages private citizens like Mr. Fesenmaier to bring cases in the name of the United States against government contractors, such as Precision Lens, the company’s owners, and individual physicians like Dr. Swarup, who are accused of knowingly violating Medicare laws. False Claims Act cases, also called qui tam cases, return money back to the Treasury for false claims made to federal programs. The False Claims Act requires payment to successful whistleblowers of between 15% and 30% of the total recovery.
Mr. Fesenmaier advised the Justice Department that Precision Lens, Sightpath, and Ehlen offered and paid kickbacks to physicians in the form of luxury hunting, skiing, fishing, golfing, and other trips and entertainment, beginning in the 1990s and continuing until recently. He also provided evidence that Sightpath entered into sham consulting agreements with physicians. Mr. Fesenmaier alleged that Dr. Swarup was a prime recipient of these illegal kickbacks, which were intended to and did induce physicians like him to use Defendants’ products and services, including mobile cataract surgery equipment, products, and services in connection with eye surgeries paid for by Medicare from January 1, 2006 to January 1, 2015.
The kickbacks Dr. Swarup allegedly accepted from Sightpath violated the Anti-Kickback Statute, which prohibits the exchange (or offer to exchange) anything of value in return for the referral of claims for payment to federal health care programs, like Medicare. When claims are submitted as a result of a kickback, they are false or fraudulent. Thus, by knowingly paying and accepting such kickbacks, both the Anti-Kickback Statute and the False Claims Act are violated.
“Mr. Fesenmaier’s resolve in exposing these illegal schemes is admirable,” said Jennifer Verkamp of Morgan Verkamp LLC. “The sanctity of the physician-patient relationship is critical to the running of our healthcare system. Congress long ago determined, by enacting the Anti-kickback Statute, that kickbacks in any part of the medical system degrades health care. The willingness of whistleblowers like Mr. Fesenmaier to step forward to expose kickback schemes helps to preserve the integrity of our healthcare system and protects patients.”
The claims against Dr. Swarup, Sightpath, and its president and owners were settled after they entered into settlement discussions with the United States and Relator. The matter will proceed against the remaining Defendants, Precision Lens and Paul Ehlen.
Mr. Fesenmaier is represented by Jennifer Verkamp, Frederick Morgan, Jr., and Maxwell Smith of Morgan Verkamp LLC in Cincinnati, and Susan Coler of Halunen Law in Minneapolis. The United States is represented by Assistant United States Attorney Chad Blumenfield, who was instrumental in leading the Government’s investigation and reaching settlement terms with Sightpath and the other settling parties.
The case is United States ex rel. Fesenmaier v. Sightpath Medical, Inc., et al., Civil No. 13-3003. A copy of the Amended Complaint can be found here. A copy of the United States’ Complaint-in-Intervention can be found here.
Morgan Verkamp LLC is a Cincinnati law firm whose practice is focused on whistleblower cases under federal and state False Claims Acts and IRS and SEC whistleblower laws. Its principals, Jennifer Verkamp and Rick Morgan, have handled qui tam cases nationwide for 22 years.
Contact: Jennifer M. Verkamp or Frederick M. Morgan, Jr., 513-651-4400