Domestic manufacture is a required component of many military and Veterans Administration contracts. Congress has mandated that the United States use its purchasing power to buy goods made in the United States or in designated countries. We take that mandate seriously and will not hesitate to take appropriate legal action to ensure compliance. - U.S. Attorney Andrew M. Luger of the District of Minnesota
The Department of Justice announced that Medtronic (NYSE: MDT) has agreed to pay $4.41 Million to settle allegations that it violated the False Claims Act by giving false statements to the U.S. Department of Veterans Affairs (VA) and the U.S. Department of Defense (DoD).
Between 2007 and 2014 Medtronic sold products manufactured in China and Malaysia which are prohibited countries under the Trade Agreements Act of 1979 (TAA). Medtronic allegedly purchased spinal surgery devices from China and then relabeled them “Manufactured in Memphis, TN” before selling them to the VA and DoD certifying that they were made in the USA. The suit was originally filed by three whistle-blowers that will receive a total of $749,700 of the recovered funds.
Yesterday's settlement was the third federal lawsuit against the company since the company moved its headquarters from Minnesota to Dublin, Ireland in January. On Feb. 5 the company settled allegations of over-billing for $1.25 million and on Feb. 6 it agreed to pay $2.8 million to settle claims for billing non-reimbursable procedures. Wrong-doing has been denied in all three cases.