Delaney Kester LLP Announces Client Recovery in $18 Million False Claims Act Settlement Involving Johnson & Johnson Subsidiary Acclarent, Inc.
BOSTON, MA— JULY 26, 2016—Delaney Kester LLP announces a multimillion-dollar whistleblower recovery for its client in connection with the U.S. government’s recent $18 million settlement with Acclarent, Inc., a subsidiary of Johnson & Johnson. The settlement brought an end to the five-year litigation brought by Melayna Lokosky against Acclarent and Johnson & Johnson for allegedly violating the federal False Claims Act. Ms. Lokosky was represented in the settlement by Delaney Kester LLP, including attorneys Royston H. Delaney and Ilyas J. Rona of Boston, Massachusetts; and Charles F. Kester of Los Angeles, California.
The settlement resolved claims that Acclarent allegedly defrauded the federal government by concealing the intended use of a nasal medical device known as the Relieva Stratus MicroFlow Spacer (“the MicroFlow Spacer”). Although the MicroFlow Spacer only received FDA clearance to be used with saline solution, Ms. Lokosky – a former Acclarent sales representative – alleged that the actual intended use of the device was to deliver Kenalog-40, a corticosteroid, into the sinuses.
Ms. Lokosky further alleged that false and misleading marketing of MicroFlow Spacers for off-label uses caused the government to pay millions in healthcare claims that would not have been paid had Acclarent truthfully disclosed the true intended use of the product.
When Ms. Lokosky brought her concerns about alleged illegal marketing to Acclarent’s management team, they terminated her.
Ms. Lokosky’s complaint and the resulting $18 million settlement were kept under seal until July 22, 2016, following the criminal conviction of Acclarent’s former CEO, Bill Facteau, and its Vice President of Sales, Pat Fabian. A federal jury convicted Facteau and Fabian on 10 counts of introducing misbranded and adulterated devices into interstate commerce. Ms. Lokosky’s allegations about Acclarent’s marketing practices prompted the government’s investigation into Facteau and Fabian and the resulting criminal prosecution.
“Both the $18 million settlement and the guilty verdicts against Acclarent’s former executives are significant wins for whistleblowers everywhere,” said attorney Rory Delaney of Delaney Kester LLP. “Moreover, these are hard-fought and long-awaited vindications for Ms. Lokosky, who courageously stood up to Acclarent for more than five years.”