CHICAGO--(BUSINESS WIRE)--Medline Industries, Inc., one of the nation’s largest suppliers of medical and surgical products to healthcare providers throughout the United States, along with its charitable arm The Medline Foundation (collectively, “Medline”), have agreed to pay $85 million to the federal government to resolve whistleblower Sean Mason’s False Claims Act allegations against Medline.
Mason alleged that Medline engaged in a widespread illegal kickback scheme targeting hospitals and other healthcare providers that purchase medical and surgical products paid for by federal healthcare programs, resulting in violations of the federal False Claims Act. Although a party to the agreement, the U.S. Department of Justice elected not to intervene in the lawsuit, which Mason pursued as a qui tam action on behalf of the Federal government on a non-intervened basis. The settlement is among the largest settlements of a False Claims Act case in which the government declined to intervene.
“This case demonstrates that, even when the federal government does not intervene, whistleblowers and their counsel can still work with the DOJ to successfully prosecute claims of government fraud,” said Mason’s counsel Kirk E. Chapman of Milberg LLP. “Since the government cannot possibly take on all False Claims Act cases, some recoveries require the additional efforts of tenacious private whistleblowers, such as Sean, and their counsel.”
Milberg, Marek Law Office PC, Williams Montgomery & John Ltd and Clifford Law Offices PC served as co-counsel to Mason, a former Medline employee who oversaw and administered rebates paid to hundreds of hospitals, skilled nursing facilities, hospices and other healthcare providers that entered into annual requirements contracts for Medline’s medical and surgical products. Mason alleged that many of these customer rebates were in fact disguised kickbacks which comprised Medline’s illegal kickback scheme targeting hospitals and other healthcare providers that purchase medical and surgical supplies paid for by Federal healthcare programs such as Medicare and Medicaid. Federal statutory and regulatory law forbids suppliers from providing remuneration to induce purchasing by Providers, and the False Claims Act prescribes that any claims for payment submitted to the government that are tainted by such unlawful remuneration are per se improper.
The False Claims Act allows private citizens to sue companies that they discover are defrauding the government, and to receive an award for their efforts. Following his discovery of Medline’s fraudulent scheme, Mason filed his original qui tam complaint in federal District Court in Chicago, Illinois in October 2007. Upon an investigation into Mason’s allegations, the United States declined to join the case. However, determined to hold Medline accountable for its illegal conduct, Mason nevertheless elected to continue to pursue his case and filed an amended complaint in March 2009.
Judge Suzanne Conlon dismissed the amended complaint in May 2009, but granted Mason’s motion for leave to file a Second Amended Complaint in December 2009. In February 2010, the court denied Medline’s motion to dismiss the action in its entirety. Discovery in the case commenced, and soon thereafter, Mason and Medline entered into a tentative settlement agreement that required approval from the United States, as a real party-in-interest. The DOJ approved the settlement agreement on March 10, 2011. For his part in bringing the fraudulent conduct to light and continuing the case on a non-intervened basis, Mason was awarded 27.5% of the settlement proceeds.
Case citation: Mason v. Medline, Civil Action No. 1:07-cv-05615 (Northern District of Illinois)
About Milberg
Milberg LLP is widely recognized as a leading class action and complex litigation firm, representing individual and institutional investors, unions, and consumers. Founded in 1965, the Firm has litigated landmark cases resulting in groundbreaking legal precedents and corporate governance reforms benefitting shareholders. Milberg also maintains an active False Claims Act litigation practice. Through representation of whistleblowers who have independent knowledge of government contract fraud, Milberg counsel have been successful in securing the return of millions of dollars to federal and state treasuries. Please visit the Milberg website (www.milberg.com) for more information about the Firm.
About Marek Law Office PC
Sherman Marek investigates, develops and pursues major federal lawsuits nationwide, enlisting teams of co-counsel to meet the unique needs of each client depending on their circumstances, claims and location.
About Williams Montgomery & John Ltd
Williams Montgomery & John Ltd. is nationally known for preparing and trying large complex cases. The firm prides itself on being a firm of trial lawyers. Williams Montgomery & John have represented clients in a wide variety of class actions. C. Barry Montgomery and Edward R. Moor of the firm represented Mason. To learn more about the firm visit www.willmont.com.
About Clifford Law Offices
Robert A. Clifford and the lawyers at Clifford Law Offices represent years of practice in the area of personal injury law including aviation, transportation, medical malpractice and product liability law. The largest law firm in Chicago concentrating on plaintiffs’ personal injury and wrongful death law, Clifford Law Offices’ attorneys have hundreds of years of combined experience. Some of the partners have held leadership positions within various bar associations on the local, state and national level. Every member of the firm upholds the highest principle of the legal profession in placing the individual client first. The firm often is said to set the standard in professional excellence. Moreover, it is important to note that as a result of the litigation handled by the firm, many defective products and dangerous and false practices have been changed or abandoned altogether. Please visit www.cliffordlaw.com.