09.08.14
Reuters reports that London, U.K.-based Smith & Nephew plc has agreed to pay $11.3 million to settle allegations that it sold the U.S. government devices it fraudulently claimed were U.S.-made. They were actually came from Malaysia.
The settlement was filed Sept. 3 in the Tennessee federal court, ending a whistleblower lawsuit brought in 2008 by a former Smith & Nephew information technology manager, Samuel Cox. Cox will get $2.3 million, the government $6 million, and $3 million will go toward attorneys' fees, according to the settlement.
Under U.S. law, whistleblowers are entitled to a share of a successful recovery.
Cox claimed that Smith & Nephew violated the federal Trade Agreements Act, which requires contractors to sell the government products made either in the United States or in countries it has signed agreements with.
In 2007 and 2008, Smith & Nephew sold the Department of Veterans Affairs orthopedic devices that it had bought from Malaysia-based Straits Orthopaedics while claiming they were made in the United States, according to the lawsuit. Malaysia does not have a trade agreement with the United States.
The U.S. government did not intervene in the suit but joined in negotiating the settlement earlier this year, according to H. Vincent McKnight of Sanford Heisler, an attorney for Cox.
The case is the first whistleblower settlement involving false country of origin claims for medical devices, according to a press release from Sanford.
“Today’s settlement sends a clear message to those medical device companies that routinely violate the Trade Agreements Act by misrepresenting the ‘country of origin’ of goods sold under contract to U.S. Government agencies,” McKnight said in a statement.
Smith & Nephew has made no public comment on the matter.
The settlement was filed Sept. 3 in the Tennessee federal court, ending a whistleblower lawsuit brought in 2008 by a former Smith & Nephew information technology manager, Samuel Cox. Cox will get $2.3 million, the government $6 million, and $3 million will go toward attorneys' fees, according to the settlement.
Under U.S. law, whistleblowers are entitled to a share of a successful recovery.
Cox claimed that Smith & Nephew violated the federal Trade Agreements Act, which requires contractors to sell the government products made either in the United States or in countries it has signed agreements with.
In 2007 and 2008, Smith & Nephew sold the Department of Veterans Affairs orthopedic devices that it had bought from Malaysia-based Straits Orthopaedics while claiming they were made in the United States, according to the lawsuit. Malaysia does not have a trade agreement with the United States.
The U.S. government did not intervene in the suit but joined in negotiating the settlement earlier this year, according to H. Vincent McKnight of Sanford Heisler, an attorney for Cox.
The case is the first whistleblower settlement involving false country of origin claims for medical devices, according to a press release from Sanford.
“Today’s settlement sends a clear message to those medical device companies that routinely violate the Trade Agreements Act by misrepresenting the ‘country of origin’ of goods sold under contract to U.S. Government agencies,” McKnight said in a statement.
Smith & Nephew has made no public comment on the matter.