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Largest Settlement Ever for Violations of the U.S. Anti-Kickback Statute

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at March 2, 2016

Kaiser Health News is reporting that medical device maker Olympus Corp., has agreed to pay a staggering $646 million to resolve criminal and civil probes into illegal kickbacks and bribes to doctors and hospitals.

Federal prosecutors said Tuesday that the company’s settlement is the largest ever for violations of the U.S. Anti-Kickback Statute. A portion of the company’s payout, $22.8 million, will resolve similar bribery allegations in Latin America.

U.S. investigators said the Tokyo company’s “greed-fueled kickback scheme” from 2006 to 2011 used research grants, consulting deals, luxury trips, gifts of hot-air ballooning and spa treatments and free equipment to induce influential doctors to order more Olympus devices at prominent hospitals and help the company keep out competitors.

“Kickbacks are illegal because they taint buying decisions,” said Paul Fishman, U.S. Attorney for the District of New Jersey, whose office spearheaded the investigation. “Doctors and hospitals should decide to purchase medical devices based solely on legitimate considerations, like quality and price. They shouldn’t be tempted and swayed by free trips, free equipment, consulting agreements or research grant money.”

“This is exactly why we need whistleblowers – because companies cannot be relied upon to put patients before profits,” Burns said. Olympus was “funding a massive kickback scheme that channeled millions of dollars in payola to doctors and hospitals.”

As part of the settlement, Olympus agreed to a corporate-integrity agreement and the appointment of an independent monitor, a former prosecutor in the Oklahoma City bombing cases.

No one is going to jail.

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