Medical Device Manufacturer THD Pays $700,000 to Resolve FCA Allegations

Medical Device Manufacturer THD Pays $700,000 to Resolve FCA Allegations

On September 6, the US Attorney’s Office for the District of Maryland announced that THD America, Inc., and its parent company, THD SpA of Italy, agreed to pay $700,000 to resolve False Claims Act (FCA) allegations.

The allegations arise out of a physician’s use of the hemorrhoid removal system manufactured by THD, known as the Slide One Kit. Between 2014 and 2017, physicians performing procedures using the kit were required to bill for the procedure using a temporary code for new services. As a result of this temporary code, use of the kit was considered experimental and thus, reimbursement under government programs like Medicare and Medicaid was often denied. THD allegedly encouraged colorectal and general surgeons to bill Medicare and Medicaid programs using other billing codes to avoid use of the temporary code, thereby increasing reimbursement from government programs.

THD’s $700,000 civil settlement consists of approximately $598,000 to the federal Medicare program and almost $102,000 to state Medicaid programs. This settlement resolves the related qui tam action, United States ex rel. Arthur v. THD America, Inc., 16-cv2571-ELH, brought by a former employee of THD America. The relator’s share of the civil settlement will be $115,000.

The press release can be found here.

John Deere Settles FCPA Charges for $10 Million

On September 10, the US Securities and Exchange Commission (SEC) announced that Deere & Company, doing business as John Deere, agreed to settle charges for bribery in violation of the Foreign Corrupt Practices Act (FCPA) arising out of conduct of employees of its wholly owned subsidiary, Wirtgen Thailand.

According to the SEC’s order, between 2017 and 2020, employees of Wirtgen Thailand paid bribes to government officials of multiple Thai government agencies, including the Royal Thai Air Force, the Department of Highways, and the Department of Rural Roads, to win various government contracts for road building, totaling $4.3 million. The improper payments took the form of cash, sham consulting fees, extravagant international travel under the guise of “factory visits,” meals, and massage parlor visits. The SEC order further states that these payments were inaccurately recorded as legitimate expenses, resulting in violations of the FCPA’s records and internal accounting controls provisions.

John Deere acquired Wirtgen Group, a German-based company that included the Thai subsidiary, in December 2017. As part of the acquisition, John Deere failed to fully integrate Wirtgen Group and Wirtgen Thailand into its existing compliance program, allowing the improper conduct to go unchecked for years. John Deere’s $10 million settlement included approximately $5.4 million in disgorgement and prejudgment interest resulting from the government contracts, along with a civil penalty of $4.5 million.

The press release can be found here.

Health Care Company Executive Charged With Health Care Fraud

On September 10, the US Attorney’s Office for the District of Massachusetts announced the indictment of Miguel Saravia, the CEO of Dana Group Associates and former COO of Prime Behavioral Health. Saravia has agreed to plead guilty to six counts of health care fraud.

According to the allegations, from 2017 to 2023, Saravia directed a group of individuals with no prior billing or medical training to enter billing codes for therapy services that were never provided, and separately to use billing codes for psychotherapy visits resulting in higher reimbursement. In turn, Saravia submitted — or directed others to submit — false claims for non-existent behavioral health treatments or more complex and expensive treatments than were provided.

The press release can be found here.

One Individual Charged, Three Individuals Plead Guilty to Health Care Fraud Scheme

On September 4, the US Attorney’s Office for the District of Massachusetts announced that a Massachusetts resident, Henry Ezeonyido, was charged with one count to commit health care fraud and six counts of health care fraud. Three other individuals, Brendon Ashe, Darline Cobbler, both of Massachusetts, and Ariel Lambert, a New York resident, each agreed to plead guilty to conspiracy to commit health care fraud.

According to court documents, between October 2019 and February 2022, Ezeonyido allegedly submitted fraudulent health care insurance claims on his behalf and others, including the three charged individuals. These insurance claims related to traumatic injuries that purportedly occurred internationally, including stabbings, gunshot wounds, and hit-and-run car accidents.

Ezeonyido allegedly submitted fake documents, including fabricated medical records, bank records, and police reports, to health insurance companies in support of these false claims, resulting in $1 million billed for services that were never provided. Upon receiving the payments from health insurance companies, Ashe, Cobbler, and Lamber allegedly paid a portion of the reimbursements to Ezeonyido and other co-conspirators.

The press release can be found here.