'$200 for How to Pronounce a Word'
PORTLAND, Ore. (CN) - A medical device maker fired its top compliance officer for reporting that the company paid kickbacks to Chinese government officials and that he'd found "questionable payments" to doctors, such as "$200 for how to pronounce a word," the former executive claims in a $10 million lawsuit.
Acumed, headquartered in Hillsboro, develops and sells medical and surgical devices such as screws and plates. Hillsboro is a suburb of Portland.
Former Acumed executive Edward S. Boehmer sued the company for whistleblower violations, wrongful firing, discrimination and other claims, in Multnomah County Court.
Boehmer had been the global director of quality, regulatory & compliance, and the chief compliance officer since in 2002. He says he was fired last year for reporting illegal practices.
Boehmer claims that Acumed's agents paid government officials in China in exchange for contracts, and also paid off hospital directors and surgeons in China and Brazil.
The kickbacks included "a payment to a Chinese surgeon for 15 minutes of bogus consulting time in exchange for the surgeon's and his hospital's continued use of Acumed products," according to the complaint.
Boehmer claims that when he audited a file that recorded Acumed's use of consultants in the United States, he found "questionable payments" such as "$500 for an introduction to a surgeon, $200 for how to pronounce a word, and many other suspicious entries."
"There were many cases of purported 'surveys' for which the consultants were paid $100 to $400 for answers to questions that could be completed by the surgeon's sales representative or an office staff member," the complaint states.
Boehmer says he reported these and other improper payments, which violate the federal anti-kickback law, to Acumed CEO David Jensen.
"Mr. Jensen refused to do anything about the illegal practices because Acumed's revenue would have been adversely affected had he taken actions to stop those illegal practices," the complaint states.
Boehmer says he reported the kickbacks in March 2013, and three months later Jensen told him he was not allowed to travel to China anymore, and that further investigations in China would be handled by the company's international sales department.
Because Boehmer also reported the kickbacks to Colson Associates, the owner of Acumed, Jensen also forbade him from contacting Colson without his permission, according to the complaint.
Boehmer says he contacted Colson again, saying that "Mr. Jensen's interference was not acceptable and [was] highly risky to Acumed."
After that, Boehmer was "subject to personal attacks by Mr. Jensen and other of Mr. Jensen's subordinates at Acumed," according to the complaint.
The company fired Boehmer "falsely nominally predicated on nonsensical false accusations of years-old misconduct," according to the lawsuit.
Boehmer's complaint includes claims for age and disability discrimination. He says he suffers from depression, which Acumed employees harassed him about, and he was replaced by an employee 20-30 years younger than he is.
Boehmer seeks $10 million in damages from Acumed and Colson Associates, including front and back pay, and damages for emotional distress.
The two companies are the only defendants.
Boehmer is represented by Edward S. McGlone III of Lake Oswego.