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Whistleblower to Collect $50 Million in Olympus Medical Kickback Case

by Tracy Connor /
Members of the media walk past the Olympus Corp. logo during a news conference in Tokyo in 2011. Bloomberg via Getty Images

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A corporate whistleblower is set to collect $51 million — his share of a massive settlement with Olympus America to resolve charges it gave doctors and hospitals kickbacks to order its medical equipment.

John Slowik worked for the imaging giant for 20 years and served as its compliance officer before he was let go in 2010, according to court papers.

In a qui tam whistleblower suit, he alleged that the company ignored his efforts to stop it from giving financial rewards to hospitals and physicians for buying Olympus endoscopes, which are used to examine the digestive tract.

Doctors and hospital officials got lavish junkets, fancy meals, research grants and free equipment, prosecutors and Slowik alleged. In one case, three doctors got a trip to Japan after their hospital ditched another supplier and switched to Olympus, prosecutors said.

Slowik, who declined to be interviewed, claimed in court papers that when he took steps to stop the kickbacks, he was bounced from his compliance job and subjected to "systematic harassment" that made him physically ill.

Under the False Claim Acts, whistleblowers who file suit on behalf of the federal government showing that taxpayers are being ripped off are entitled to a percentage of the money recovered.

In the settlement announced Tuesday, Olympus will pay $310 million to settle civil claims by the federal government and state, and Slowik gets $51 million — one of the largest whistleblower awards in history.

Olympus also agreed to pay $312 million in criminal penalties to avoid prosecution. The total settlement is the largest amount ever paid by a medical device company and the largest for violations of the Anti-Kickback Statute, which covers medical purchases paid for by federal health care programs like Medicare.

A spokesman for Olympus said he could not comment on Slowik's suit but noted that it cooperated with a Justice Department probe that began in 2011.

“Olympus leadership acknowledges the Company’s responsibility for the past conduct, which does not represent the values of Olympus or its employees," the company said in a statement.

"Olympus is committed to complying with all laws and regulations and to adhering to our own rigorous Code of Conduct which guides our business processes, decisions and behavior. The Company has implemented and will continue to enhance its robust compliance program.”

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