Ninth Circuit Restores FCA Case Against Biotronik

Ninth Circuit Restores FCA Case Against Biotronik

On September 10, the Ninth Circuit reversed a federal district court’s decision dismissing a whistleblower complaint against Biotronik which alleged violations of the False Claims Act (FCA), Anti-Kickback Statute (AKS), and the Stark Law. The Ninth Circuit found that the district court erred in holding that the FCA’s public disclosure bar precluded the whistleblowers from bringing their claims.

The complaint alleged a three-way compensation arrangement, claiming that Biotronik, the manufacturer of cardiac rhythm devices, hired a sales representative who recommended the devices to his brother, a doctor, who implanted the devices at Cedars-Sinai Medical Center. Cedars-Sinai allegedly billed federal health insurance programs for the devices and Biotronik allegedly paid the sales representative a commission for these sales. The district court in the Central District of California originally dismissed the action based on the FCA’s public disclosure bar, which requires dismissal where the complaint alleges the same or substantially the same fraud that has already been publicly disclosed. The district court held that the allegations in the complaint were barred because The New York Times previously published an article that reported Biotronik’s use of various financial incentives to encourage physicians to use the devices over their competitors’.

The Ninth Circuit disagreed with the district court, finding that the allegations in the complaint did not “merely repeat what the public already knew about Biotronik’s tactics to increase its sales,” and instead, provided new and material information, including allegations related to the Stark Law, AKS, and Biotronik’s alleged practicing of hiring doctors’ relatives in violation of federal law.

The case is US ex rel. Sam Jones Co., LLC v. Biotronik Inc., Case. No. 23-55361.

Whistleblowers Defend $1.6 Billion Win Against Johnson & Johnson in FCA Suit

Whistleblowers Jessica Penelow and Christine Brancaccio, former sales representatives for Janssen Products LP, a subsidiary of Johnson & Johnson (J&J), filed an appellate brief on September 17 defending their $1.6 billion jury verdict relating to the off-label promotion of HIV drugs Prezista and Intelence and the constitutionality of the FCA’s qui tam provision.

We previously reported on the appeal filed by J&J in July. In its appeal, J&J argued that deputizing private relators usurps executive authority vested exclusively in the president, thereby violating separation-of-powers principles. J&J also contended that the award’s massive statutory penalties constitute an excessive fine under the Eighth Amendment and punish protected commercial speech, implicating the First Amendment.

In their responsive appellate brief, the whistleblowers defended the constitutionality of the FCA’s whistleblower provisions, arguing that “any doubt about the FCA constitutionality” has long been settled by the FCA’s “unbroken 162-year history” and the “history of similar relator statutes from both before and after the framing of the Constitution,” which “explains why every appellate panel to consider a constitutional challenge to the FCA’s relator provisions has rejected it.” The whistleblowers further argued that the penalties against J&J were not unconstitutionally excessive and instead, fell “in the middle of the range Congress authorized.”

The case is United States v. Janssen Prods., No. 25-1818 (3rd Cir. 2025).

Chiropractor Sentenced to Seven Years in Prison for Health Care Fraud and Unemployment Insurance Fraud Schemes

On September 12, Benjamin Tekippe, a chiropractor from Louisiana, was sentenced to seven years in prison for his role in health care fraud and unemployment insurance fraud claims.

According to the US Department of Justice (DOJ), Tekippe allegedly solicited patients with Blue Cross Blue Shield of Louisiana (BCBSLA) insurance to visit his clinic by offering “free” chiropractic massages. However, the insurer discovered that Tekippe allegedly billed for these massages and for other services that were either not performed or not performed as billed. This included thousands of false and fraudulent claims for services that he provided while he was out of office. The government alleged that Tekippe submitted over $2.3 million in fraudulent claims to BCBSLA. Tekippe also purportedly submitted weekly certifications falsely claiming that he was unemployed when he was billing for services.

Earlier this year in April, Tekippe was convicted by a jury of six counts of health care fraud and one count of wire fraud. He was also ordered to pay $753,794.36 in restitution.

Read the DOJ’s press release here.

CEO and Advisor Charged With $100 Million Pump-and-Dump Fraud Scheme

On September 12, the DOJ announced that an indictment was unsealed in the Eastern District of Virginia charging Lai Kui Sen, the CEO of Ostin Technology Group Co. Ltd. (OST), and Yan Zhao, a financial advisor, with a pump-and-dump scheme that resulted in over $110 million investor losses.

The indictment alleges that the defendants, along with their co-conspirators, engaged in a fraudulent scheme to artificially inflate the price and trading volume of OST stock through social media and messaging service applications, including promotions that impersonated advisors and financial professionals. The government alleges that the defendants inflated the value of the stock from $22 million to more than $1 billion. As the stock price rose, the defendants allegedly opened brokerage accounts that were used to sell millions of shares that were obtained through non-bona fide securities offerings and resulted in members of the conspiracy obtaining more than $110 million in proceeds from the sale of the stock.

The defendants are charged with conspiracy to commit securities fraud and wire fraud, securities fraud, and wire fraud.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the DOJ’s press release here.

TOMORROW: FCA Enforcement Trends in the Life Sciences and Health Care Industries Webinar

Tuesday, September 23, 2025

12:00-1:00 PM ET

Investigations Partners Hillary Stemple and Nadia Patel will lead a CLE webinar on the FCA and effective compliance controls in light of the re-launch of the DOJ and US Department of Health and Human Services’ FCA Working Group.

Register here.