Medical device manufacturer Medtronic and three affiliated companies have agreed to pay the U.S. $4.41 million to resolve allegations stemming from a whistleblower complaint that they made false statements to the U.S. Department of Veterans Affairs and the U.S. Department of Defense about the country of origin of certain products they sold to the U.S.
The whistleblower complaint alleges that Medtronic plc, Medtronic Inc., Medtronic USA Inc., and Medtronic Sofamor Danek USA Inc., sold certain cardiac and spinal surgery devices and instruments to the Veterans Administration (VA) and Defense Department that they certified would be made in the United States or other approved countries.
The Trade Agreements Act of 1979 (TAA) generally requires that companies selling products to the U.S. government manufacture them in the United States or in another designated country.
Three whistleblowers sued the Medtronic companies under the False Claims Act, alleging that the products were promoted as made in the U.S. or other TAA-approved countries when they were actually made in China and Malaysia, two nations that the trade agreement prohibits.
The whistleblowers alleged that the Medtronic companies deceptively sold these medical products to the U.S. between 2007 and 2014.
“Domestic manufacture is a required component of many military and Veterans Administration contracts,” said U.S. Attorney Andrew Luger of the District of Minnesota, who handled the case. “Congress has mandated that the United States use its purchasing power to buy goods made in the United States or in designated countries. We take that mandate seriously and will not hesitate to take appropriate legal action to ensure compliance.”
Whistleblowers, who are authorized under the False Claims Act to sue on behalf of the U.S., are central to the nation’s fight against fraud. Since January 2009, the U.S. Justice Department has recovered a total of more than $23.9 billion through False Claims Act cases, with more than $15.2 billion of that amount recovered in cases involving fraud against federal health care programs.
Whistleblowers whose False Claims Act cases lead to a recovery for the U.S. are awarded between 15 and 30 percent of the total amount recovered.