On February 28, 2023, a federal jury in the District of Minnesota found the Cameron-Ehlen Group, d/b/a Precision Lens, and its founder and owner Paul Ehlen (the “Defendants”) guilty of paying kickbacks to ophthalmic surgeons in violation of the False Claims Act, 31 U.S.C. 3729 (“FCA”) and Federal Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b) (“AKS”) between 2006 and 2015.[1] This case serves as an excellent example of the risks that medical device manufacturers and distributors incur by not having an effective compliance program that identifies and corrects compliance issues.
The Government alleged in the Complaint that Precision Lens, a distributor of medical devices including cataract surgery products, and Ehlen took physicians on high-end skiing, fishing, golfing, hunting, sporting, and entertainment vacations to induce them to purchase and use Precision Lens’ products in violation of the AKS. The Complaint also alleged that the Defendants sold frequent flyer miles to the physicians at a significant discount and flew physicians on private jets to lavish locations.[2] The Government contended that, in many instances the physicians were allowed to take the trips free of charge or were charged a nominal amount that was well below the fair market value of the trips.[3] Further, in order to fund these lavish trips, Precision Lens allegedly created a “slush fund” that was used to hide over $100,000 in “marketing rebates.”[4]
As alleged, the Defendants’ ultimate goal was to...
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