Weekly Enforcement Report: Medical Equipment & Kickbacks

While labs were absent from recent enforcement actions, last week saw kickback schemes involving DME companies and a medical device company.

Last week was a slow one on the enforcement front, with few announcements, none of which involved labs or lab testing. However, three actions involving kickbacks and medical equipment companies were announced, one in which a durable medical equipment (DME) pharmacy employee was convicted for his role in a kickback scheme, one in which a medical device company settled False Claims Act (FCA) and Anti-Kickback Statute (AKS) allegations for $9.75 million, and one in which two medical equipment company owners and a telemarketing company owner were charged for their roles in an alleged $14.5 million fraud scheme.

Editor’s Note: This article was updated on August 21, 2024 to include updates on the first and third cases included in this report. The two medical equipment company owners charged in the third case were cleared of all charges on August 19, 2024.

Date Action Announced	Defendant(s)	Allegations/Charges/Convictions	Result
Jan. 20	Mark Sorensen, an employee at Symed, a Chicago-based pharmacy	Participated in a roughly $25 million kickback scheme in which he paid kickbacks to a co-conspirator for “patient leads” that were then used to bill the Department of Labor’s Office of Workers’ Compensation Programs, TRICARE, and Medicare.	Convicted of 3 counts of payment of illegal kickbacks and 1 count of conspiracy. Could see up to five years in prison for each count. Yet to be sentenced. Three others involved in the scheme have pled guilty to their roles and are yet to be sentenced.¹ Update: Sorensen was sentenced to three and a half years in prison on March 27, 2024 for his role²
Jan. 20	DePuy Synthes, Inc., a medical device manufacturer and Johnson & Johnson subsidiary	Alleged to have violated the FCA and AKS by paying kickbacks to a Massachusetts-based orthopedic surgeon in exchange for his use of free tools and spinal implants provided by DePuy. Some of the instrumentation was used in surgeries performed overseas on patients who were not beneficiaries of federal health programs, thus leading to the submission of false claims to Medicare.	Settled for $9.75 million to resolve the claims originally brought by a former DePuy sales rep in a qui tam whistleblower lawsuit. The whistleblower will receive about $1.37 million of the settlement amount.³
Jan. 24	· Kuba Zarobkiewicz · Anthony Fermin · Farrukh Mirza	Zarobkiewicz and Fermin, who own various pharmacies and medical equipment companies, are alleged to have paid telemarketing company owner and operator Mirza kickbacks for signed doctor’s orders for medically unnecessary back, knee, and hip braces. Those orders allegedly led to $14.5 million being falsely billed to Medicare.	· The group is charged of a total 22 counts relating to kickbacks, identity theft, and healthcare fraud · The defendants face prison time if convicted · All three have been released on bond and are awaiting trial⁴ Update: A federal jury found Zarobkiewicz and Fermin not guilty of all criminal charges on August 19, 2024. Evidence presented at trial showed the two defendants were misled by a marketer and that the two had fully cooperated with the law enforcement investigation⁵

Source: U.S. Department of Justice.^1-3

For more insight on recent enforcement actions and court cases involving the healthcare industry and labs, see the Labs in Court and Enforcement Scorecard sections of our Lab Compliance Advisor report.

Weekly Enforcement Report: Medical Equipment & Kickbacks

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