On February 28, 2023, a jury in the United States District Court in Minnesota issued a $43 million verdict in favor of the plaintiffs in United States ex rel. Fesenmaier v. Cameron-Ehlen Grp, a False Claims Act (FCA) suit alleging that the defendants, including a distributor of ophthalmological supplies and its majority owner, violated the federal Anti-Kickback Statute, 42 U.S.C. Section 1320a-7b(b).

Defendant, The Cameron-Ehlen Group, Inc., d/b/a Precision Lens, is a distributor of intraocular lenses and other products used in ophthalmological surgeries. The relator filed suit in November 2013, alleging that the distributor, suppliers, and others paid physicians in gifts, trips, cash payments pursuant to sham consulting arrangements, free or discounted equipment, and other valuable consideration to induce them to use the suppliers’ and distributors’ products in their ophthalmological procedures. The kickbacks paid to the physicians included high-end skiing, fishing, hunting, and other vacations, including to the College Football National Championship and the Masters golf tournament. The procedures were reimbursed by federal healthcare programs, including Medicare and Medicaid.

The relator had first raised his concerns in conversation with the FBI sometime in 2010, and he had continued to communicate with the FBI for several years thereafter. In a 2012 Chapter 7 Bankruptcy filing, however, the relator failed to disclose the potential legal claim as an asset to the bankruptcy trustee. That failure was the basis of a motion for summary judgment brought by defendants, who argued that judicial estoppel prohibited the relator from asserting a claim in the FCA case that he told the Chapter 7 Bankruptcy Trustee did not exist. The Court denied that motion in an August 2020 ruling.

After a 7-week trial, a federal jury found The Cameron-Ehlen Group, Inc. and its majority owner jointly liable for causing the submission of 64,575 false claims to Medicare, resulting in damages of $43,694,641. Under the FCA, the damages determined by the jury will be trebled, and each false claim found by the jury is subject to a potential civil penalty ranging from $5,500 to $11,000. The jury verdict means that the two defendants may be liable for anywhere between $355 million to $710 million after accounting for trebling and civil penalties under the FCA.

The relator’s share of the verdict will be anywhere from 15% to 25% of the total proceeds depending on his contributions to the case. The relator had received 19.5% of the proceeds from two earlier settlements with two of the defendants in the case.

The DOJ’s press release announcing the verdict is available here. The First Amended Complaint in the case is available here. The Court’s ruling on defendants’ motion for summary judgment as to the relator is available here.