Medical company agrees to pay $48.2 million in federal whistle-blower lawsuit filed by Macon woman

awomack@macon.comMay 14, 2013 

In 2001, Julie Darity first noticed something amiss at the job where she had worked for 13 years.

She found that her employer, C.R. Bard Inc., was offering illegal kickbacks and was selling its radioactive seeds used to treat prostate cancer at inflated prices, which Medicare was paying.

Darity, who lives in Macon, filed a federal whistle-blower lawsuit in 2006.

New Jersey-based Bard has agreed to pay $48.2 million to settle the case, which was unsealed Monday.

Customers could order the seeds, used in brachytherapy to deliver a prescribed dose of radiation directly to cancer cells, from multiple companies. But Bard allegedly offered doctors grant money, rebates, free medical equipment and advertising campaigns to entice them to buy their product at inflated prices, according to a news release issued by Darity’s legal team, which includes Macon lawyer Charles E. Cox Jr.

Darity’s lawsuit alleges Bard inflated the cost of seeds sold to Medicare patients from 1998 to 2006 and used a portion of the excess profits to pay for the kickbacks.

The kickbacks created false and inflated claims to be submitted to Medicare, a violation of the federal False Claims Act, according to the release.

Company responds

Bard issued a statement Tuesday saying the settlement allows the company to move on and “continue to focus on delivering life-enhancing medical devices and technologies to patients around the world. We remain committed to continuously enhancing and improving our compliance programs in accordance with industry standards.”

The statement goes on to say that the company expects its employees to “adhere to the highest ethical behavior in all daily activities and comply with all laws and regulations that apply to the conduct of Bard’s business worldwide.”

Darity, 56, said she first reported what she suspected as questionable activities to her supervisors.

“I did exactly what was outlined in the company ethics policy,” she said. “I wanted to think things were being corrected.”

In time, she realized nothing had changed. She filed an internal whistle-blower complaint.

Her job was eliminated in November 2005, soon after an investigation was launched into her whistle-blower complaint, she said.

Darity had worked for Bard, which has an office in Covington, for more than 18 years. When her job was eliminated, she was a manager in the Brachytherapy Contracts Administration division.

Out of a job, Darity filed the lawsuit in U.S. District Court for the Northern District of Georgia in January 2006.

A judge placed the case under seal, sending Darity into a life she describes as being that of a “hermit.”

“I couldn’t speak with my friends or family” about the case, she said. “The elephant is in the room, but you can’t acknowledge it’s there.”

Cox, who has represented Darity since the initial lawsuit was filed, said government investigators started looking at the case soon after it was filed.

Darity spent the next six years helping government investigators sort through documents.

During the hours of assisting investigators, Darity didn’t know whether she’d get any money, Cox said.

“It was her conviction to doing what she thought was right that carried it through,” he said.

Darity said she thought the case would die without a resolution.

Settlement talks started in January 2012, said Peter Chatfield, a Washington, D.C., lawyer who worked on Darity’s legal team.

Representatives from the U.S. Justice Department used an estimate of Bard’s alleged tainted sales as a guide for the settlement discussions with Bard, Chatfield said.

Because the federal government encourages whistle-blowers to file lawsuits against companies defrauding the government, whistle-blowers are rewarded with between 15 and 25 percent of funds recovered, according to the release.

Darity, who now works for the Social Security Administration, will receive 21 percent of the settlement proceeds, about $10 million before taxes.

As party of the settlement, the government has agreed not to prosecute Bard criminally and Bard has agreed to pay an additional $2.2 million and to enhance its corporate compliance program to prevent future illegal activity, according to a Justice Department news release.

Darity plans to use the money to help her children and grandchildren, while also being able to make her mortgage payments without worrying.

She said she knows her years of work have made a difference. “Tens of millions of dollars are going back into the taxpayers’ pockets,” Darity said. “I like to think this will be a deterrent for this type of behavior.”

The Justice Department has recovered nearly $10.3 billion since January 2009 in cases involving fraud against federal heath care programs, according to a department news release.

To contact writer Amy Leigh Womack, call 744-4398.

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