A federal jury on Tuesday found a Bloomington-based distributor of lenses used in cataract surgeries and its majority owner liable for tens of millions of dollars in illegal kickbacks used to induce surgeons into using its products.
After determining that Paul Ehlen and his Cameron-Ehlen Group Inc., which does business as Precision Lens, violated the federal anti-kickback statute and False Claims Act, the jury returned a $43 million judgment against the defendants to cap a six-week trial before U.S. District Judge Wilhelmina Wright in St. Paul.
The jury concluded that such kickbacks — spanning from luxury hunting and fishing outings to travel to major sporting events — helped win Precision Lens millions of dollars of business and caused the submission of 64,575 false claims to the Medicare program between 2006 and 2015.
"The jury's verdict protects the integrity of the Medicare system for patients and those healthcare providers who operate fairly and legally," Assistant U.S. Attorney Chad Blumenfield said in a statement Tuesday. "Companies may not use expensive trips and other items of value to persuade physicians to use their products, and physicians may not accept that remuneration."
Precision Lens and Ehlen, through a statement provided by their attorneys to the Star Tribune after Tuesday's verdict, maintained their innocence and expressed disappointment over the outcome.
"We will continue to defend ourselves and our wholly appropriate actions as we navigate the appeals process," the statement continued. "We are grateful for the continued support of our partners, employees, and customers, all of whom have been extremely supportive to us throughout these proceedings. We remain focused on our mission and commitment to the doctors, facilities, and manufacturers who place their trust in us each day."
The U.S. Attorney's Office for Minnesota first filed its lawsuit against Precision Lens and Ehlen in 2018. For violating the False Claims Act, defendants are liable for triple the amount of damages in the case. That could bring the jury's $43 million judgement to well in excess of $120 million. The government is expected to file a motion seeking treble damages and statutory penalties for each false claim.
The federal government's involvement spawned from allegations made from a company whistleblower who filed a broader lawsuit in 2013. The whistleblower, Kipp Fesenmaier, will receive a percentage of the amounts awarded at trial, according to the U.S. Attorney's Office.
