On February 12, 2020, the United States Attorney for the District of Colorado announced that Dr. William Choi and three companies that he owned paid the United States $2.35 million to resolve civil allegations that Dr. Choi received illegal kickbacks from distributors of spinal implant devices that he used in surgeries he performed. The settlement was the result of a False Claim Act case that was filed by Enockson Law’s client, Mark Rahe, under the False Claims Act’s qui tam whistleblower provisions.
The federal Anti-Kickback Statute makes it unlawful for a doctor to solicit or receive money or other remuneration paid to influence a doctor’s health care decisions. An unlawful kickback occurs if a doctor receives money or other perks intended to influence that doctor’s health care decisions, such as a referral to another practitioner or a choice of supplies for a surgery.
According to the lawsuit that was filed by Mr. Rahe, in 2011 and 2015, Dr. Choi caused the creation of two distributorships of spinal equipment, Nexus Spine and 4D Spine. These two distributorships provided spinal implant equipment, such as rods, screws and cages, to hospitals for use in surgeries that Dr. Choi performed. The lawsuit further alleged that Dr. Choi arranged for third parties to serve as the registered owners of both Nexus and 4D, while he secretly maintained control of both distributorships and the money those distributorships made. Through this arrangement, it was alleged that Dr. Choi solicited and received from Nexus and 4D improper payments and other benefits. Based on this conduct, it was alleged that Dr. Choi violated the federal Anti-Kickback Statute and the federal False Claims Act because the surgeries he performed involved payments from federal health programs, including Medicare and TRICARE.
Mr. Rahe, the whistleblower, was an employee of Dr. Choi’s medical practice. Based on his employment, Mr. Rahe had inside knowledge of the kickback relationships. In May of 2017, Enockson Law, along with the Law Firm of Michael S. Porter, filed a civil action, under seal, on Mr. Rahe’s behalf in the United States District Court for the District of Colorado, Case No. 17-cv-01208-WJM-NRN.
Under the False Claims Act, private citizens like Mr. Rahe who know about a fraud against the United States may present allegations of fraud to the government by bringing a lawsuit under seal on behalf of the United States. If the United States obtains a monetary recovery under the False Claims Act based on the allegations in a whistleblower’s lawsuit, then the private citizen shares in the recovery. Here, the United States investigated Mr. Rahe’s allegations, notified the court that it would intervene in the case, and then proceed to reach a settlement with Dr. Choi, of which Mr. Rahe received a portion.
The claims settled were allegations resolved by settlement. In entering into the settlement, Dr. Choi did not admit to any liability. To read the Department of Justice’s press release, click here.
Enockson Law has an active False Claims Act practice representing whistleblower qui tam relators in actions to recover money fraudulently taken from the Federal government. Enockson Law’s cases have involved healthcare fraud, oil and gas fraud and fraudulent procurement cases.