Memphis, TN - David Kustoff, United States Attorney for the Western District of Tennessee, has announced that Medtronic, Inc. has agreed to pay the United States $40 million to settle civil allegations that its Medtronic Sofamor Danek Division (MSD) paid kickbacks to doctors to induce them to use MSD's spinal products. The settlement results from the investigation of a civil action which was filed by a private whistleblower on behalf of the United States. The case was investigated by the United States Attorney's Office in Memphis, the Department of Justice Civil Division, the Federal Bureau of Investigation, the Office of the Inspector General of the Department of Health and Human Services, the United States Postal Service and the Tennessee Bureau of Investigation.

The government alleges that between 1998 and 2003, Medtronic paid kickbacks to physicians in several ways, including sham consulting fees, sham royalty payments and extravagant trips to top tourist destinations. Kustoff stated, "The settlement announced today demonstrates that schemes involving submissions of false or fraudulent claims by health care companies and health care providers to federal health care programs will be vigorously and energetically pursued. This agreement should serve as a deterrent to those entities that attempt to defraud or deceive the taxpayers."

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