$646M Olympus Kickback Scandal Rocks New Jersey

ATLANTIC CITY, N.J. – U.S. Attorney Philip R. Sellinger spoke on the False Claims Act Panel at the New Jersey State Bar Association’s Annual Meeting and Convention in Atlantic City, New Jersey.

The False Claims Act was originally enacted in 1863 in response to defense contractor fraud during the American Civil War, and it remains the federal government’s primary civil tool to address fraud that impacts federal spending.

In 2016, Olympus, a medical device company, entered into a $646 million global resolution that included a $310 million False Claims Act settlement to resolve allegations of pervasive and systemic kickbacks related to the sale of their endoscopic devices and other equipment. The matter was initiated based upon a qui tam filed in our district, and the relator received a share of the FCA recovery amounting to more than $50 million.

U.S. Attorney Sellinger highlighted the District of New Jersey’s leading role in rooting out fraud, kickbacks, and false claims in healthcare and other government enforcement across the country. He noted that the office has created a criminal COVID Fraud Strike Force, which includes three additional Assistant U.S. Attorneys dedicated to COVID fraud enforcement.

The District of New Jersey employs a unique structure to help it combat healthcare and government fraud. It has two units tasked with enforcement in those areas, and those units have both criminal and civil Assistant U.S. Attorneys and support staff. These units often work in parallel on matters when appropriate, including False Claims Act cases.

The False Claims Act allows private citizens to file suit under seal on behalf of the United States to seek restitution and penalties for fraud involving federal funds. Once such a suit is filed, the government will investigate the claims and pursue a recovery in appropriate instances. Since 1986, the federal government has recovered more than $75 billion in settlements and judgments under the False Claims Act nationwide.