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Abbott Fends Off FCA Claim

The False Claims Act ("FCA" or "the Act") exists as an opportunity for citizens to bring the government's attention to fraudulent conduct that unduly costs the American taxpayer. While Abraham Lincoln originally signed the Act in 1863, the two most substantial components of the Act were implemented as amendments in 1986 and 2009. The two amendments lowered the standards of proof and increased the potential damages in these types of cases.

In 2006, Kevin Colquitt ("Colquitt") filed a suit against Abbott Labs ("Abbott" or "the Company"), alleging that the Company had trained employees to promote and market off-label. Specifically, Colquitt alleged that Abbott encouraged sales representatives to push the sale of stents, which are to be inserted into bile ducts, to be used in vascular procedure. As a consequence of Abbott's off-label marketing, Colquitt alleges that there were 35,000 false claims issued costing the American taxpayer $219,402,827.63 between 2004 and 2006.

Colquitt's attorneys tried to paint him as a hero. According to Law360, Colquitt's attorneys told jurors that Colquitt was "courageous" in bringing the matter to the federal government's attention instead of "looking the other way," or helping Abbott evade detection.

Abbott did not deny that it used its stents for vascular procedures. Instead, the Company argued that the practice was commonplace throughout the country and benefited patients. Abbott's attorney claimed there could not possibly have been fraud because Medicare "knew the vast majority of vascular stent procedures were done using stents that had been cleared for use in bile ducts and continued to reimburse doctors for such procedures." The jury ultimately favored Abbott's view and sided with the Company in a 10-1 vote. Abbott commented on the decision, saying, "This verdict supports a decade-long, generally accepted medical practice that benefited tens of thousands of patients."

Aside from this particular instance, the FCA has been incredibly successful in recouping money from the government through fraudulent business practices. In fact, the government has recovered nearly $3.5 billion in settlements and judgments in fiscal year 2015 alone.

The legal team at SFMS has significant experience litigating whistleblower matters. If you have any questions regarding this subject or this posting, please contact Alec Berin ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Sources:

http://www.bernlieb.com/whistleblowers/History-Of-The-False-Claims-Act/index.html

https://www.justice.gov/opa/pr/justice-department-recovers-over-35-billion-false-claims-act-cases-fiscal-year-2015

http://www.law360.com/articles/780925

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