On Monday, May 15, 2023, U.S. District Judge Wilhelmina M. Wright entered judgment against Defendants Precision Lens and its owner Paul Ehlen in the amount of $487 million for violations of the False Claims Act (“FCA”) and Anti-Kickback Statute (“AKS”). In February 2023, a federal civil jury found Precision Lens and Ehlen liable for paying illegal kickbacks to eye surgeons to induce their use of Precision Lens’s products in cataract surgeries that were reimbursed by Medicare. The jury found that the Defendants submitted 64,575 false claims to Medicare that were tainted by illegal kickbacks, resulting in $43.7 million in damages to Medicare.
Each violation of the FCA at that time carried a minimum civil penalty of $5,000 and the statute mandates treble damages. The court held that the jury had correctly calculated damages, including $358,445,780 in statutory penalties and $131,083,925.13 in treble damages, resulting in the total amount of $487,048,705.13. The Defendants argued that the amount was unconstitutionally excessive given that the value of the related items sold by Precision Lens was only around $4 million, but the court rejected that argument.
At trial, the government proved that the Defendants lavished gifts, travel, and entertainment on the physicians. Some examples include luxury ski, fishing, golfing, husting, sporting, and entertainment vacations, such as to the Masters golf tournament in Augusta and the College Football National Championship Game in Miami, including travel on private jets. The Defendants also sold frequent flyer miles to the physicians at a significant discount, enabling physicians to travel for well below market rate. The government also proved that Precision Lens maintained a slush fund in furtherance of its kickback scheme.
The FCA qui tam suit was originally filed in 2013 by a whistleblower, who will receive a percentage of the award. The Defendants indicated that they plan to appeal the verdict.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act and Anti-Kickback investigations and litigation. If you need assistance with such a matter, please contact us today.
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