bribery – LSD News

Former Minister Prasanna Ranatunga arrives at Bribery Comission

LSD News Szerkesztőség — Wed, 12 Nov 2025 05:01:33 +0000

November 12, 2025 09:15 am

Former Minister Prasanna Ranatunga has arrived at the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), a short while ago.

The former minister has arrived at the CIABOC to record a statement, Ada Derana reporter said.

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US SEC yet to serve legal documents to Gautam Adani, his nephew in alleged $265 million bribery case

LSD News Szerkesztőség — Fri, 27 Jun 2025 20:14:51 +0000

The US Securities and Exchange Commission (SEC) has filed a status update with a federal court in New York, detailing its ongoing efforts to serve legal documents to billionaire Gautam Adani and his nephew Sagar in connection with a civil securities case filed last year.

In a June 27 letter submitted to Magistrate Judge James R Cho of the US District Court for the Eastern District of New York (EDNY), the SEC said it is continuing to pursue formal service of the summons and complaint under the provisions of the Hague Service Convention.

The defendants, who are based in India, are yet to be officially served.

US SEC has to serve the summons to Adani Group founder and chairman Gautam Adani and his nephew Sagar in the alleged USD 265 million payoffs to win lucrative renewable power supply contracts, through proper diplomatic channels as it has no jurisdiction to summon a foreign national directly.

The SEC originally filed the complaint on November 20, 2024, alleging that two violated US securities laws by making false and misleading statements related to a September 2021 bond offering by Adani Green Energy Ltd.

According to the SEC, Rule 4 (f) of the Federal Rules of Civil Procedure governs service in foreign jurisdictions and permits the use of international treaties, such as the Hague Convention. The rule does not impose a specific time limit for service, provided reasonable efforts are being made.

Ex-President Ranil accuses Bribery Comm. of wilfully misleading court

LSD News Szerkesztőség — Sat, 17 May 2025 00:30:52 +0000

Former President Ranil Wickremesinghe says that the submissions made with reference to him in court today by the Counsel for the Bribery Commission is a wilful misleading of the Court and that he is consulting his lawyers regarding the action to be taken.

Issuing a statement today (16), the former President stated that the media reports highlighting submissions alleged to have been made in Court today by the Counsel for the Commission to Investigate Allegations of Bribery or Corruption (CIABIC) with reference to him, does not mention that the application to cancel bail already granted to MP Chamara Sampath Dassanayake has been rejected by Court nor is any mention made of the fact that the Counsel for the accused objected to these submissions made by the Counsel for the Commission.

Wickremesinghe stated that in his statement to the Commission on April 28, he stated that the spouse of Chamara Sampath consulted him as to whether his privileges had been violated by a statement made by Minister Samantha Vaidyaratne.

“I stated that since I had given advice as a lawyer, I am not in a position to make any disclosures,” the former President said.

Wickremesinghe said he referred the Commission to Articles 148, 149 and 150 of the Constitution, whereby the Parliament has full control over public finance and the funds of the Republic not allocated by law for specific purposes shall form one Consolidated Fund.

He stated that monies cannot be withdrawn from the Fund except under the authority of a warrant under the hand of the Minister of Finance, and that therefore, monies held in the Fixed Deposit is a violation of the Constitution.

“The said Circular is only a restatement of the law. A Circular by itself is not law. According to the law the proper course of action is to withdraw the Fixed Deposit and apply for such purposes authorised in the Provincial Budget.”

“These submissions made in respect of me is a wilful misleading of the Court. I am consulting my lawyers as to action to be taken,” the ex-president revealed.

Furthermore, Wickremesinghe said he has written to the Commission as to the manner in which the investigation was carried out by the CIABOC.

The complaint filed by the Bribery Commission against MP Chamara Sampath Dassanayake was taken up before Colombo Chief Magistrate today (May 16).

Dassanayake, who is currently in remand custody, was produced in court as proceedings resumed over allegations that he caused a loss of more than Rs. 1.76 billion to the government during his tenure as Chief Minister of the Uva Provincial Council.

Representing the Bribery Commission, an officer informed the court that Dassanayake had withdrawn funds from a fixed deposit account belonging to the Uva Provincial Council before its maturity, which allegedly resulted in a significant financial loss to the state.

Earlier, former President Ranil Wickremesinghe, in a statement made to the media, had claimed that a Treasury circular issued in 2015, during his term as Prime Minister, allowed Provincial Councils to withdraw such fixed deposits prematurely. He had argued that Dassanayake’s actions were therefore not unlawful.

However, the Bribery Commission officials countered this claim in court today, noting that the said circular was issued on November 22, 2016, while the fund withdrawal in question took place on February 29, 2016 — several months before the circular came into effect.

The court was further informed that the Bribery Commission had summoned Wickremesinghe to record a statement, during which it was revealed that the former President had made his public remarks without knowledge of the actual date the circular was issued.

The officer conducting the investigation also said Wickremesinghe’s statement, made during a media conference, had adversely impacted the ongoing investigation.

It was also revealed in court that Wickremesinghe had made the statement in question at the request of MP Dassanayake’s wife. The investigating officer therefore requested the court to revoke Dassanayake’s bail and remand him on the grounds of attempting to interfere with the investigation.

However, the Colombo Magistrate’s Court rejected the request made by the Bribery Commission to revoke the bail granted to MP Chamara Sampath Dassanayake.

Adani stocks in focus after Gautam Adani indicted in US over role in alleged bribery, fraud

LSD News Szerkesztőség — Thu, 21 Nov 2024 03:07:08 +0000

Stocks of Adani Group companies will be in focus on Thursday after Gautam Adani, head of India’s Adani Group, and seven others face charges in the United States in a multibillion-dollar bribery and fraud scheme, news agencies including Reuters and Bloomberg reported on November 21. Prosecutors announced the charges on Wednesday, alleging that the group bribed Indian officials to secure solar energy contracts.

Adani announced an investment in green energy on Wednesday. The announcement came as the company’s chairman congratulated U.S. President-elect Donald Trump on his election victory. “Adani announced the investment while also congratulating U.S. President-elect Donald Trump on his election win,” a Reuters report said.

It may be noted here that Trump has promised to simplify regulations for energy companies, making it easier for them to drill on federal land and construct pipelines.

Gautam Adani indicted in US: What the case is all about

As per the case by the US Securities and Exchange Commission, Gautam Adani has been charged with allegedly “defrauding American investors and bribing officials”. Adani, his nephew Sagar Adani, 30, executives of Adani Green Energy, and Cyril Cabanes, an executive of Azure Power Global Ltd were charged with “conspiracy to commit securities and wire fraud, as well as substantive securities fraud, for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions through false and misleading statements”.The indictment says Adani and the others paid approximately $265 million in bribes. They expected these contracts to generate $2 billion in profit over two decades. Prosecutors claim some involved in the scheme used code names like “Numero uno” and “the big man” to refer to Gautam Adani.

The indictment also alleges Adani, his nephew Sagar Adani, and another executive, Vneet Jaain, hid the bribes from lenders and investors to secure over $3 billion in loans and bonds for Adani Green Energy.

The charges fall under the Foreign Corrupt Practices Act, a US law against bribery in foreign business dealings.

“This indictment alleges schemes to pay over USD 250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,” said Deputy Assistant Attorney General Lisa H Miller.

“These offences were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of US investors,” she added.

Adani Group did not immediately respond to requests for comment, where the charges were announced early Thursday morning, Reuters added.

Reports said Gautam Adani and Sagar Adani have been issued arrest warrants. The US Securities and Exchange Commission filed related civil charges against the two men and another individual, Cyril Cabanes.

Also Read: Adani Green Energy raises $600 million via 20-year bonds

The US government has not yet revealed full details about the specific allegations against Adani and the other individuals. , a large conglomerate based in India.

Gautam Adani, 62, holds the position of 22nd richest person globally, according to Forbes magazine, with an estimated net worth of $69.8 billion.

This is the second major setback for the Indian billionaire, coming after the Hindenburg Research case where the US-based short-seller accused Adani Group of improperly using offshore tax havens. Adani Group has denied these allegations. The report, released in January 2023, had triggered a significant drop in Adani Group stocks, wiping out approximately $150 billion.

Adani scraps $600 million bond, other notes drop on US charges

Units of Adani Group scrapped a $600 million dollar bond on Thursday after US prosecutors charged Gautam Adani, the group founder with participating in an alleged bribe plot. The group’s existing US-currency notes plunged in Asian trading.

The Indian conglomerate decided not to proceed with the offering in view of recent press releases from Department of Justice and the Securities and Exchange Commission, according to a person familiar with the matter who asked not to be identified.

Adani Green Energy UP dollar notes sold in March declined by 15 cents, a record, according to data compiled by Bloomberg. Other notes from group companies dropped the most since a short-seller report in 2023 by Hindenburg Research sparked a more than $150 billion rout in Adani Group stocks.

Adani Electricity Mumbai dollar notes due in February 2030 dropped by 8.2 cents, the most since a short-seller report in 2023 by Hindenburg Research allegations.

Full list of names and details of defendants

According to a US Attorney’s Office (New York) office, the people involved in the briber and fraud case are:

GAUTAM S. ADANI
Age: 62
India

SAGAR S. ADANI
Age: 30
India

VNEET S. JAAIN
Age: 53
India

RANJIT GUPTA
Age: 54
India

CYRIL CABANES
Age: 50
France / Australia

SAURABH AGARWAL
Age: 48
India

DEEPAK MALHOTRA
Age: 45
India

RUPESH AGARWAL
Age: 50
India

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Henry Cuellar Indicted Over Bribery Scheme

LSD News Szerkesztőség — Fri, 03 May 2024 21:30:26 +0000

Representative Henry Cuellar, a Texas Democrat in a crucial swing district, and his wife were charged with participating in a yearslong $600,000 bribery scheme involving Azerbaijan and a Mexican bank, according to a federal indictment unsealed in Houston on Friday.

The accusations against Mr. Cuellar, 68, and his wife Imelda, 67, center on allegations of bribery and money laundering in connection with their efforts on behalf of an oil and gas company owned by Azerbaijan’s leaders as well as an unnamed bank based in Mexico City, according to the 54-page complaint.

Mr. Cuellar, a Laredo native first elected in 2004, is also accused of acting as an agent of a foreign entity while a U.S. government official — by delivering a speech favoring Azerbaijan in Congress and inserting provisions into aid bills to benefit those who were paying bribes to his family.

The government claimed that Mr. Cuellar, who once served as Texas secretary of state, was paid to back legislation intended to stymie regulation of the payday loan industry, which has been accused of predatory lending practices against the poor. He also tried to weaken money laundering laws that effected Mexico’s banking sector, according to prosecutors.

Mr. Cuellar “agreed to influence legislative activity and to advise and pressure high-ranking U.S. executive branch officials regarding measures beneficial to the bank,” they said.

The couple was released on Friday after each of them paid a bond of $100,000 after a brief appearance before a federal magistrate in Houston.

Representative Hakeem Jeffries of New York, the minority leader, said Mr. Cuellar would take leave from his post as the top Democrat on the Homeland Security Appropriations Subcommittee while he fights the charges.

Christie Stephenson, a spokeswoman for Mr. Jeffries, described Mr. Cuellar as “a valued member of the House Democratic Caucus,” and said he was “entitled to his day in court.”

The long-rumored charges — which the congressman vehemently denied — come at a precarious moment for an increasingly empowered Democratic minority in the House. It cast instant doubt on the party’s chances of holding a district, which runs along the border with Mexico, which has significant political and symbolic importance.

Mr. Cuellar is one of the more conservative Democrats in the House, the only anti-abortion member of his party in the chamber and an occasional critic of the Biden administration. But he is a reliable Democratic vote on most issues.

The criminal complaint echoes the indictment brought against Senator Robert Menendez, Democrat of New Jersey, who was charged with accepting bribes on behalf of Egyptian businesses last year.

Payments to Mr. Cuellar and his wife, made from 2014 to 2021, were laundered through “sham consulting contracts” and shell companies owned by Ms. Cuellar, who performed “little to no legitimate work” under the contracts, lawyers with the Justice Department’s criminal division wrote. Two of the couple’s adult children are partial owners of the businesses but were not charged.

Prosecutors disclosed a detailed inventory of interactions between Mr. Cuellar and Azerbaijani officials that indicated a close level of cooperation, along with evidence that he pressured officials in the Obama administration to take a harder line against Armenia.

In January 2015 — after his wife had already been paid $120,000 by the oil company — the congressman emailed an unnamed diplomat from Azerbaijan the draft of a speech he planned to give on the floor of the House praising the country’s effort combating terrorism, according to the indictment.

A year later, Mr. Cuellar texted the same diplomat to say he had introduced legislation that favored Azerbaijan.

“You are the best El Jefe!” the diplomat replied.

At around the same time, Henry and Imelda Cuellar was entering into a series of corrupt deals with a bank in Mexico, prosecutors charged. In March 2015, the congressman expressed concerns the arrangement would be discovered and asked a bank official to create a middleman to “disguise” payments, the indictment said.

“We need to find another scheme,” Mr. Cuellar told them, according to the government.

In a statement before the indictment, Mr. Cuellar maintained his innocence and said he cleared his wife’s work with the Ethics Committee.

“I want to be clear that both my wife and I are innocent of these allegations,” Mr. Cuellar said. “Everything I have done in Congress has been to serve the people of South Texas.”

“Before I took any action,” he added, “I proactively sought legal advice from the House Ethics Committee, who gave me more than one written opinion, along with an additional opinion from a national law firm.”

Mr. Cuellar said he tried to meet with federal prosecutors in Washington to explain his side of the story, but they declined the meeting.

The F.B.I. searched Mr. Cuellar’s Laredo home in 2022, but he won a close primary victory anyway over a more progressive challenger, Jessica Cisneros. The primary divided prominent Democrats; Representative Alexandria Ocasio-Cortez, the New York progressive, backed Ms. Cisneros, but senior members of leadership, including Speaker Nancy Pelosi, campaigned for Mr. Cuellar.

On Friday, he vowed to continue his re-election campaign.

Azerbaijan, an oil-rich former Soviet republic in the Caucuses region, has been at the center of several significant scandals that have touched on influence-peddling, corruption and election rigging.

It has maintained a robust lobbying presence in the United States, and has aggressively courted members of Congress in an effort to win support for its ongoing conflict with Armenia over the breakaway Nagorno-Karabakh region.

In 2013, the State Oil Company of the Azerbaijan Republic, which is controlled by the country’s leaders, funneled $750,000 through U.S. intermediaries to pay expenses for a junket to Baku, the country’s capital, for 10 members of Congress and 32 staff members, according to the House ethics committee.

Mr. Cuellar did not attend. But several other Texas legislators from both parties did — and also took home a lavish gifts that included a crystal tea set and hand-woven rug.

Prosecutors said that payments to Ms. Cuellar’s shell companies, in the form of retainers worth $30,000 to $60,000, slowed after the public disclosure of the Baku trip in 2015.

Amazon seller consultant avoids jail in employee bribery scheme

LSD News Szerkesztőség — Sat, 15 Jul 2023 06:11:17 +0000

A prominent Amazon consultant has avoided jail time for his involvement in an elaborate scheme to bribe company employees to give his clients an upper hand on the e-retailer’s sprawling online marketplace.

Ephraim “Ed” Rosenberg in March plead guilty to a criminal charge, stemming from a Sept. 2020 indictment that charged six people with conspiring to pay Amazon employees bribes in exchange for confidential information that would benefit third-party merchants selling goods on the company’s marketplace.

Rosenberg was sentenced Friday in a federal court to two years of probation, and 12 months of house arrest. He was also ordered to pay a $100,000 fine.

“Mr. Rosenberg’s illegal actions were harmful to the sellers who work hard every day to build a thriving business on Amazon, and today he was held accountable for his crimes,” Amazon spokesperson Mira Dix said in a statement. “When we uncovered the suspicious behavior related to this case in 2018, we reported it to the FBI and actively supported the ensuing investigation.”

Rosenberg, 48, is a well-known figure in the world of Amazon third-party sellers. He runs a consultancy business that advises entrepreneurs on how to sell products on the online marketplace, and navigate unforeseen issues with their accounts. Rosenberg’s Facebook group for sellers, ASGTG, has over 70,000 members, and he hosts a popular conference for sellers each year in his hometown of Brooklyn.

The case provides an unfiltered glimpse into the cottage industry of consultants and brokers that has flourished alongside the growth of Amazon’s third-party marketplace. Since its launch in 2000, the marketplace has become a lucrative and competitive platform for millions of sellers to market their wares. From May 2019 to May 2020, U.S. small and medium businesses selling on the marketplace had an average of over $160,000 in sales, according to a report issued by Amazon.

While the marketplace has helped Amazon haul in tens of billions of dollars in sales, it’s also become a notorious host to counterfeit, unsafe and expired goods. Behind the scenes, scammers have for years resorted to illicit tactics to squash competitors, artificially boost their listings or bypass Amazon’s marketplace rules.

The case isn’t the first time Amazon has dealt with issues of company employees leaking confidential information or manipulating the site in exchange for payments. In 2018, the company investigated claims that employees, primarily based in China, who received payments worth $80 to more than $2,000, in exchange for access to internal data, The Wall Street Journal reported.

Amazon has said it invests hundreds of millions of dollars per year to ensure products are safe and compliant. The provision of internal data to sellers by employees violates Amazon’s seller policies and code of conduct.

Rosenberg’s punishment is far less severe than what other defendants have faced. A former Amazon employee was sentenced last year to 10 months in prison, while a consultant who also sold products on Amazon is serving 20 months in prison.

Prosecutors recommended a lesser sentence for Rosenberg because there was no evidence he initiated attacks on competitors’ product listings like some of his conspirators, who allegedly lodged false complaints to Amazon, and bought fake negative reviews for rivals’ products. Other defendants also pleaded guilty to tax evasion charges in addition to the bribery scheme.

Between July 2017 and Sept. 2020, Rosenberg paid bribes directly and indirectly to Amazon employees in order to steal confidential data, as well as gain access to internal systems. In one case, Rosenberg made 33 different PayPal payments worth $18,650 to an Amazon employee in Seattle in exchange for confidential information about third-party seller accounts.

Most of his payments were for account “annotations,” or an internal Amazon employee log of infractions on a sellers’ account, which Rosenberg and another defendant, Joe Nilsen, covertly referred to as “fruit” in email correspondence.

“Sellers who had been suspended from selling on Amazon could use this internal information to see exactly what Amazon had figured out about the sellers’ infractions and to tailor their appeals for reinstatement accordingly,” prosecutors alleged.

Nilsen bragged to Rosenberg over email about the services he had gained access to by bribing employees.

“I am not trying to make it seem like we have all the abilities in the world, but even though it took some time and some face to face meetings, we obtained abilities that still blow my mind,” Nilsen wrote in a Jan. 2018 email to Rosenberg, referring to his internal contacts as “high up ‘flick the switch’ type guys.”

“I don’t want to have a little menu floating around but if you are in need of anything, just run it by me and I will let you know,” Nilsen continued.

Previously unsealed court documents said Rosenberg allegedly sent a “veiled threat” to an Amazon employee at the company’s Seattle headquarters as part of the bribery scheme, Bloomberg reported. The documents also detailed the defendants’ elaborate efforts to dodge detection by authorities, including allegedly stuffing a llama-shaped ottoman with cash believed to be bribes, according to Bloomberg.

Rosenberg’s guilty plea in March marked a reversal of his position on the case. He repeatedly denied prosecutors’ allegations and claimed in LinkedIn messages to CNBC he was being framed, as well as in posts on Reddit forums and Facebook groups. He later admitted he made false statements about the case and admitted to bribing Amazon employees in a public apology posted online.

An attorney for Rosenberg, Jacob Laufer, wrote in a sentencing memo that while Rosenberg’s conduct was illegal, it was a symptom of a marketplace ruthlessly governed by Amazon wherein merchants could be arbitrarily booted off the marketplace at any time, and struggling to get their businesses reinstated, turned to illicit tactics.

“Given that these sellers were in the dark about their alleged wrongdoing, how to correct the problem, and when Amazon might recognize its error, sellers were frequently desperate and sometimes would resort to illegal means to obtain the information necessary to accomplish the goal of saving their businesses,” according to the memo. “The ‘information necessary’ was the annotations.”

Dix said Amazon has processes in place to help sellers avoid deactivation and get reinstated when appropriate. The company has for years been investing in improving its communications with sellers, speeding up response times and more clearly indicating policy violations, she added.

“There is no place for fraud at Amazon and no excuse for resorting to illegal activities,” Dix said in a statement.

Whistleblower alleges Medtronic engaged in bribery scheme at veterans hospital

LSD News Szerkesztőség — Wed, 12 Jul 2023 15:10:06 +0000

For nearly a decade, sales representatives from a prominent medical device maker operated a bribery scheme at a Kansas veterans hospital that wasted millions of taxpayer dollars and jeopardized the lives of patients, a recently unsealed whistleblower lawsuit alleges.

The sales reps from the company, Medtronic, “bribed hospital staff to purchase its devices over those of competitors and to purchase grossly excessive inventory,” according to the suit.

In 2017, Tom Schroeder filed the lawsuit, United States ex rel. Schroeder v. Medtronic, Inc., under seal. The case became public at the end of 2022, when the government decided not to intervene in the case.

Schroeder said before this lawsuit consumed his life, he devoted his career to the medical device industry. For years he worked at Becton Dickinson, a direct competitor to Medtronic. At the time of the alleged kickback scheme, Schroeder was a sales manager at Becton Dickinson, but eventually ascended to the level of an area vice president, making him responsible for managing sales representatives in his region.

“We get into this industry to help people,” Schroeder said.

Tom Schroeder, the whistleblower accusing Medtronic of a kickback scheme, left, is interviewed by Morgan Brennan, in Kansas City, Missouri.

CNBC

But while working at one of his client sites – a small veterans hospital in Kansas – he said he learned about a scheme that had the opposite effect. Schroeder said rumors circulated that Medtronic sales representatives were bribing VA staff to purchase an excessive amount of the company’s inventory. These products were later used in medically unnecessary procedures on veteran patients, Schroeder alleged. He said the prospect of veterans being harmed is what motivated him to file this suit.

“I had a hard time sleeping at night,” Schroder said.

Medtronic, headquartered in Dublin, Ireland, is the world’s largest medical device manufacturer in terms of revenue. Shares of the company were up more than 12% year to date as of Tuesday’s close. Medtronic’s latest annual filing also shows it had more than $31 billion in sales – with the largest portion of that coming from its cardiovascular portfolio.

The products at the center of Schroeder’s lawsuit fall under the cardiovascular umbrella.

“There’s a lot of money tied up in this business,” Schroeder said.

Medtronic declined an on-camera interview for this story. In a statement to CNBC, Boua Xiong, a Medtronic spokesperson, said the “allegations in this case are false, and Medtronic will continue to defend the litigation as it moves ahead.”

An alleged scheme

The lawsuit centers on how patients are treated for peripheral artery disease at the Robert J. Dole Veterans Affairs Medical Center in Wichita.

The condition occurs when plaque builds up in the arteries and blocks blood flow to the legs. One way to treat the disease is with an atherectomy device, which removes buildup in the arteries and restores blood flow. These devices can be used in conjunction with balloons, which expand in the vessel to put pressure on the buildup to clear it. Devices, known as stents, can then be inserted to keep the artery propped open.

Medtronic is a major manufacturer of these devices.

Schroeder said atherectomy procedures at the hospital were performed at a level he’s never seen in his career.

Unsealed text messages from the case show that in 2017, a Medtronic sales representative sat in an operating room as doctors treated a veteran patient for peripheral artery disease. As the patient lay on the operating table, this employee texted a Medtronic colleague play by play of the devices that were inserted into the veteran’s body.

Medical experts say typically one to two devices are used in these procedures. But in this case, 17 devices were deployed, according to the text messages.

“U are going to want to start going to the VA all the time,” the colleague texted in response to hearing that many devices had been used.

After the procedure concluded, the Medtronic sales representative in the operating room texted her colleague that she was taking the doctors who had performed the procedure to get lunch.

“If you read those text messages and you’re not pissed off and you’re not angry and you’re not sad for those veterans, I don’t know what to say,” Schroeder said. “That broke my heart.”

The Dole VA launched its own internal investigation in 2018 when its new medical director, Rick Ament, noticed the department that performed these procedures was spending an excessive amount of money.

Ament, who still works in the Department of Veterans Affairs system, declined an interview. CNBC obtained his nearly six-hour video deposition, which was taken in 2022 as part of Schroder’s lawsuit.

Video deposition of Rick Ament, the former medical director of the Robert J. Dole Veterans Affairs Medical Center, taken as part of this whistleblower lawsuit.

United States ex rel. Schroeder v. Medtronic

“The rough estimates early in the analysis showed that our costs were $5 million a year more than they should have been in this department alone,” Ament said in his deposition.

Ament’s investigation, which occurred independently and without knowledge of the lawsuit Schroeder filed a year earlier, found that the Dole VA was purchasing an excessive amount of inventory.

The veterans hospital purchased more devices than some of the largest veterans medical facilities, according to data the VA’s investigation gathered.

“The foundational number that we were looking at was the usage compared to the largest hospitals in the VA, and we exceeded that by multiple folds,” Ament said.

The evidence Ament’s team collected was concerning enough to shut down the unit that performed these procedures, which it did in 2018, according to his deposition testimony. Ament also said he referred the case to the VA’s Office of Inspector General, or OIG, which opened its own investigation later that year. As of this month, the OIG said its investigation still has not been completed.

Many of the documents gathered during the OIG’s investigation have recently been unsealed as evidence in Schroeder’s lawsuit. Internal Medtronic records the OIG gathered show dozens of pages of dinner receipts.

“There’s a tremendous amount of activity here,” Ament said when he saw the receipts during his deposition.

In Ament’s deposition, some of these itemizations were disclosed. In one of these outings, two orders of oysters at $34, three orders of filet mignon at $76, two orders of lobster tail for $84, a rib eye for $42 and halibut for $40 had all been expensed.

“This clearly gives the impression that influence is trying to be asserted,” Ament said in his deposition.

According to the OIG’s investigatory documents, these meals were provided to hospital staff at the Dole VA as well as the doctors the VA contracted to perform atherectomy procedures.

Medtronic pushes back

Since 2011, Medtronic and its subsidiaries have paid more than $60 million in settlements related to allegations of kickback schemes and fraud claims.

Medtronic said it has “cooperated fully” with the Department of Justice in past settlements, and “when problems were found, took appropriate remedial action.” In these settlements, Medtronic made no admissions of wrongdoing.

Past Medtronic settlements

2011: Medtronic paid $23.5 million to settle claims that the company paid kickbacks to physicians.
2015: One of Medtronic’s acquirees, ev3, paid the government $1.25 million to resolve allegations that it caused certain hospitals to submit false claims to Medicare for alleged unnecessary inpatient admissions related to atherectomy procedures.
2018: Medtronic paid $13 million related to allegations of a kickback scheme that originated from one of its subsidiaries, Covidien. Medtronic said the settlement is related to alleged misconduct largely before its acquisition of Covidien.
2019: Medtronic paid more than $17 million because a doctor from Covidien offered discounted and free marketing to doctors using its products. The alleged misconduct occurred between 2011 and 2014, largely before Medtronic acquired Covidien.
2020: The medical device giant paid more than $8 million for alleged kickbacks to a neurosurgeon.

Medtronic also said that Schroeder has “admitted under oath that he has no firsthand knowledge of any problematic procedure involving Medtronic devices.” Evidence shows “the physicians performing these procedures … received no additional compensation for the procedure of using the devices,” the company said.

In a motion to dismiss, filed in November 2022, Medtronic wrote Schroeder was a “direct competitor” who “lacks sufficiently concrete factual allegations to plausibly claim medically unnecessary procedures occurred.” However, the judge found that the allegations of medically unnecessary procedures were sufficient because Schroeder said Medtronic’s employees had a financial incentive to promote the use of its products, even if those products were not medically necessary.

“Anybody who thinks I’m a disgruntled employee just really hasn’t read the facts. Because when you read the facts, I think it speaks for itself,” Schroeder said.

Schroeder also doesn’t think you can chalk up the alleged kickback scheme at the Dole hospital to a mere rogue sales representative. Schroeder alleges that this misconduct was visible to employees with leadership roles at the company.

“I was an executive with a competing company, so I have a distinct understanding of what’s visible to the higher-ups,” he said.

Brendan Donelon, Schroeder’s attorney for this case, also pointed to this being a systemic issue.

“These pretty grotesquely large dollar amounts had to have stuck out like a sore thumb.” Donelon said. “But you can choose to look the other way.”

Brendan Donelon, the whistleblower’s attorney, right, is interviewed by Morgan Brennan, in Kansas City, Missouri.

CNBC

Donelon said one of the most shocking aspects is that one of the sales representatives who allegedly perpetrated this kickback scheme at the Dole VA is still employed with Medtronic and selling products at other VA facilities throughout the country.

“You can have policies on paper, but unless you put them into practice, unless you change your culture, it’s going to keep happening,” he said.

CNBC spoke with more than a dozen former Medtronic employees, many of whom touted the company’s compliance system and said they were not aware of any improprieties. When asked how this alleged kickback scheme could have slipped through the cracks for nearly a decade, many said if Schroeder’s allegations were true, this alleged misconduct may have been inherited from companies Medtronic acquired because they had less rigorous compliance systems in place.

In a statement to CNBC, Xiong said Medtronic has a “strong compliance and reporting program, including robust auditing and other internal controls in addition to an employee Code of Conduct.”

Douglas Winger, one of the Medtronic sales representatives named as a defendant in Schroeder’s lawsuit, won a Medtronic President’s Club award in 2016 for his sales. This annual recognition rewards Medtronic’s highest performers, who have demonstrated exceptional performance in meeting their revenue and growth targets, according to former employees. Many also said it’s the highest award the company bestows to sales representatives.

“This is not something that can be overlooked or missed,” Schroeder said.

Winger did not respond to CNBC’s request for comment.

In a deposition for this case, Winger was asked whether he recalled receiving any training about the fact that purchasing meals for federal employees was prohibited. He responded that he did not recall any training during his time at Medtronic.

During his deposition, Winger also denied providing kickbacks at the Dole VA.

Questions about patient safety

While conducting his internal investigation, Ament requested one of his nurses to pull a sample of patient data for veterans treated for peripheral artery disease. This sample, which was unsealed as part of Schroeder’s lawsuit, found that an average of seven devices were used per patient. One patient had 33 devices placed in their body.

“Where can you put 33 devices in one patient?” said Dr. Kim Hodgson, a retired vascular surgeon and the former president of the Society for Vascular Surgery.

Schroeder retained Hodgson as an expert for this case to review patient data once the VA provides more detail beyond the initial sample. Without the detailed patient information, Hodgson said he cannot make a definitive determination as to whether medical inappropriateness occurred. But in an interview with CNBC he said this sample suggests some patients may have been improperly treated.

Schroeder said he believes these veterans could be facing significant consequences. According to Medtronic’s labeling on one of its atherectomy devices, it lists some of the adverse outcomes as “amputation” and “death.”

“It enrages you,” he said. “These aren’t reversible. What’s done is done.”

The Dole VA’s investigation found that amputations among hospital patients increased sixfold during the period of alleged misconduct. However, the veterans hospital did not determine whether there was a direct correlation between the procedures and the rise in amputation rates.

In a statement to CNBC, the VA said its investigation found a large increase of costs at the Dole VA were related to purchases of Medtronic devices. It also said “patient safety is our top priority” and “to date has found no quality of care issues.”

In a recent court filing, the VA said 59 veteran patients are having their medical records examined for “possible substandard care issues.”

ProPublica previously wrote about Schroeder’s lawsuit. In response to learning about the allegations of misconduct at the Dole VA, Kansas senators urged the VA to contact patients that these procedures may have impacted.

Due to privacy laws, the identities of the patients who underwent these procedures have not been made public.

Hodgson also said the science supporting atherectomy procedures is flimsy. Hodgson says he considers the clinical trials that Medtronic uses to market its products to be “fairly low evidence trials.”

In a statement to CNBC, Xiong said that the procedure is a “safe and effective frontline therapy” and that its devices “demonstrated safety across multiple clinical trials.”

Xiong also said Medtronic’s atherectomy devices are supported by more than 15-peer reviewed studies. This includes a study called DEFINITIVE LE, which Medtronic funded. Xiong said it is “the largest independently adjudicated study of an atherectomy procedure ever conducted.”

The Food and Drug Administration approves all medical devices. One process for approval is called the 510(k) pathway. This fast-tracks devices onto the market, with no need for comprehensive studies to be done. Companies just have to prove their product is similar to ones already out there.

Medtronic received FDA approval for its atherectomy devices through this pathway.

In a video deposition conducted as part of Schroeder’s lawsuit in February, Medtronic’s chief medical officer, John Laird, was asked whether the technology regarding atherectomy procedures was approved with definitive clinical data. He said that it was approved with data that was “good enough” to allow the FDA to clear the devices for use.

Video deposition of John Laird, Medtronic’s current Chief Medical Officer, taken as part of this whistleblower lawsuit.

United States ex rel. Schroeder v. Medtronic

Laird declined an interview with CNBC.

But in 2015, at the same time the lawsuit alleges these devices were being inappropriately used in veterans, Laird gave a presentation at a University of California symposium on vascular surgery, saying “the quality of data supporting the use of atherectomy devices” is “poor.”

In a statement to CNBC, Xiong said, “Since Dr. Laird’s presentation in 2015, several additional clinical studies have been conducted.”

In 2021, the FDA issued a Class I Recall for one of Medtronic’s atherectomy devices. According to the FDA, this is the “most serious type of recall” because issues with these products can cause “serious injuries” or “death.”

The FDA reported 163 complaints, 55 injuries and no deaths reported regarding this device.

In his 2023 deposition, Laird said showing the benefit of atherectomy over other therapies would require “500 or more patients” and cost up to “$50 million.”

When questioned about the fact that Medtronic makes billions each year selling these devices, Laird said “that’s not how it works.”

Medtronic’s latest annual filing shows it had nearly $2.4 billion in sales in part from devices used to treat peripheral vascular disease – nearly 8% of the company’s total sales for 2022.

Boua said the company doesn’t share device specific sales in its public filings.

–CNBC’s Samantha Woodward contributed to this report.

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