Judge Orders Government to Pay Relators a Cut of FCA Settlement On November 4, a federal judge from the US District Court for the District of Massachusetts ordered the government to pay the relators’ share of a settlement in connection with violations of the False Claims Act (FCA). Previously, the government argued that the relators were not entitled to a portion of the settlement because they did not specifically name the settling parties as defendants. The relators asserted that they are entitled to a 15% to 25% finder’s fee cut of the settlement under the FCA.
The FCA, 31 U.S.C.
§3730(d), provides that if the government proceeds on an action brought by relators, then the relators are entitled to receive 15% to 25% of the proceeds of an action. In the underlying case, the government alleged that SpineFrontier Inc., a spine device manufacturer that sells spinal implant devices, paid kickbacks to spinal surgeons through sham consulting agreements.
Rather than compensate the surgeons for legitimate consulting, SpineFrontier allegedly compensated them for using their products. This scheme allowed surgeons to receive compensation not only from SpineFrontier but also from insurers and federal health care programs. SpineFrontier, its founder and CEO, Kingsley Chin, and its CFO, Aditya Humad, were indicted for the same alleged scheme.
The criminal trial is scheduled for March 2025. Six of the surgeons entered the settlement agreement at issue, which is valued at $3.3 million.
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