Justice department settles lawsuit against neurosurgeon and his fiancée alleging receipt of illegal kickbacks

March 23, 2023
Dr. Sonjay Fonn and Ms. Deborah Seeger of Cape Girardeau, Missouri, and their professional companies, Midwest Neurosurgeons, LLC and DS Medical, LLC, have agreed to pay $825,000 to resolve a lawsuit alleging that they violated the False Claims Act by soliciting and receiving kickbacks from spinal implant companies.

The Justice Department’s lawsuit alleged that Dr. Fonn, Ms. Seeger, Midwest Neurosurgeons, and DS Medical solicited and received remuneration from spinal implant companies in return for arranging for the use of those companies’ products in Dr. Fonn’s surgeries, in violation of the Anti-Kickback Statute. The Anti‑Kickback Statute prohibits soliciting or receiving anything of value in return for the referral of items or services covered by federal health care programs. The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives.

“The Anti-Kickback Statute plays a critical role in ensuring the integrity of medical care provided to federal health care program beneficiaries,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Treatment decisions should be determined by beneficiaries’ medical needs, not by kickbacks provided to their surgeon.”

“This case took nearly a decade of hard work by my office, the whistleblowers, the Departments of Justice and Health and Human Services, the FBI and the Missouri Attorney General’s Office,” said U.S. Attorney Sayler A. Fleming for the Eastern District of Missouri. “The U.S. Attorney’s Office will always vigorously pursue anyone who fraudulently obtains taxpayer money and defrauds Medicare and Medicaid.”

“Medical providers who accept kickbacks put personal financial gain before the needs of their patients. This behavior can harm patients and undermines the integrity of federal health care programs,” said acting Special Agent in Charge Linda Hanley of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG is proud to work alongside our federal and state partners to protect our programs from fraud and ensure that patient needs drive provider decisions.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Paul Cairns, Dr. Terry Cleaver, Dr. Kyle Colle, Dr. Scott Gibbs, Dr. Paul Tolentino, Dr. Kevin Vaught, and Daniel Henson. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The share to be paid to the private parties has not yet been determined in this matter.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the United States Attorney’s Office for the Eastern District of Missouri, with assistance from the FBI, the HHS-OIG, and the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office.

The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The matter was handled by Fraud Section Attorneys Diana Cieslak, David Finkelstein, and James Nealon, and Assistant U.S. Attorney Joshua Jones for the Eastern District of Missouri.

The case is captioned United States ex rel. Cairns, et al. v. DS Medical, LLC, et al., 1:12-cv-0004-LPR (E.D. Mo.).

The claims resolved by the settlement are allegations only and there has been no determination of liability.