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WSJ JNJ Acclarent Unit Pay 18 M Us Settlement

JNJ Acclarent

WSJ Lokosky

WSJ

I started as a medical device saleswoman at venture capital-funded startup Acclarent in June 2007; and, there was a very clear message communicated to me and my fellow sales representatives in 2008 at the launch of the Relieva Stratus Microflow Spacer: “We know what we’re doing is wrong, but we’re too small for the Food and Drug Administration (FDA) to notice, and no rep would be stupid enough to kill their career by coming forward…”

Well, meet the rep “stupid enough” to kill my career to expose healthcare fraud that started at  the inception of Acclarent in 2004 and was not only encouraged and replicated, it was rewarded when healthcare giant Johnson & Johnson acquired the company in January 2010 for $785 million. I was wrongfully terminated a year later for my efforts to expose the fraud involving the Relieva Stratus Microflow Spacer (Stratus). I rather naively thought that companies wanted to prevent fraud, not profit from it.  Johnson & Johnson, knowingly and willingly purchased Acclarent and even lowered the company’s initial asking price while holding 15% in escrow for two years over their specific concerns related to the Stratus medical device.

Johnson & Johnson Very Nervous

JNJ Ethicon aware of Stratus off label promotion #TheSociopathicBusinessModel

Despite Johnson & Johnson being “very nervous” about Acclarent’s off-label selling of Stratus, they kept the product on the market until the FDA asked them to remove the product (and all five 510(k)s associated with the device) in 2013.  Johnson & Johnson, nervously made money on the device from 2010-2013 and would still be making money on that product if I hadn’t have come forward to expose the fraud.  Adverse events are under-reported at the startup level and only known to patients when injury or death occurs years later.  Just as we’re seeing now with Gynecare mesh and Conceptus permanent birth control, also funded in part, by New Enterprise Associates (NEA) who was the largest investor in startup Acclarent.

Acclarent, like many venture capital-funded startups, hid behind innovation as a way to manipulate the facts in order to evade the law at great expense to the FDA, the company’s employees, the surgeons and hospitals to whom they sold the product and to government and private health insurance companies. Why? Because profits came before patients for Acclarent executives.

  • So if you’ve ever been lied to and manipulated, demeaned and insulted, threatened and intimidated into doing something unethical or illegal in the workplace or even in personal relationships, and you fear retaliation or worse if you try to put a stop to it, then this isn’t just my story, it’s our story.

In July 2011, I met with Assistant Attorney General Sara Bloom with the United States Department of Justice in Boston, where I also eventually met with agents for Federal Bureau of Investigation, the Food and Drug Administration and the Department of Defense. Over the next five years, we, to quote the company line, executed one hell of a pre-call plan:

  • Johnson & Johnson agreeing to pull the fraudulent medical device in question off the market in 2013
  • Johnson & Johnson agreeing to pay $18 million in civil damages in 2015
  • The arrest and indictment of former Acclarent CEO William (Bill) Facteau and VP of Sales Patrick Fabian in 2015
  • And in 2016, the convictions on 10 misdemeanors for Facteau and Fabian

Many of us have known for years that white-collar corporate fraud is the new business model, and that unless white-collar executives are held accountable — not just financially but with jail time — then this sociopathic business model will continue to thrive. Those who expose fraud will be discredited or discarded, and those willing to break the law in favor of profits and at the expense of consumers will be encouraged and rewarded where this cycle is replicated.  Facteau & Fabian, despite being arrested, indicted and now convicted in federal court have been rewarded by the industry and allowed to keep their current jobs in venture capital-funded startups.

Facteau, currently CEO of EarLens, and Fabian, CCO of NxThera — both of which are venture capital-funded startups — are appealing their 10 misdemeanor convictions, but WE have a unique opportunity to stop this cycle and put the boots to the sociopathic business model. WE have to force accountability on Judge Allison Burroughs, who oversaw Facteau and Fabian’s recent criminal trial and who is responsible for their sentencing, to ensure they serve a minimum of six months in jail. Each misdemeanor conviction can result in up to a year in jail, meaning a 10-years sentence is feasible.  But even a six-month term would send a powerful message and would ensure that neither man will work in the industry again, nor can they hold board positions.

Please click on this link and ask Judge Allison Burroughs to sentence Facteau and Fabian before their appeals so if they are denied they will go immediately to jail.

Below is a list of titles from The United States Department of Justice’s press releases over the last year related to my False Claims case.  Note the most recent also has Johnson & Johnson in the title along with subsidiary Acclarent, that’s one of the biggest wins for me personally because I fought very hard over the last five years to ensure that Johnson & Johnson couldn’t distance from their crimes by placing blame on the subsidiary without taking accountability.  The DOJ doesn’t negotiate with terrorists or relators in whistleblower cases but I was able to force accountability on DOJ but that’s a story for another day.

I respectfully ask that the media take the lead from DOJ and also include Johnson & Johnson along with Acclarent in the headlines together to force accountability.

Johnson & Johnson Subsidiary Acclarent Pays Government $18 Million

Johnson & Johnson Subsidiary Acclarent Inc. Pays Government $18 Million to Settle False Claims Act Allegations

United States Department of Justice 

Former Acclarent Executives Convicted

Former Acclarent, Inc. Executives Convicted of Crimes Related to the Sale of Medical Devices

United States Department of Justice

Former Acclarent Executives Charged with Securities Fraud

Former Acclarent, Inc. Executives Charged with Securities Fraud and Crimes Related to Sale and Distribution of Medical Devices

United States Department of Justice

 

 

 

 

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