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Rhode Island Man Convicted for Accepting Kickbacks from Medical Device Company
APRIL 20, 2012

BOSTON - A Rhode Island man was convicted yesterday in federal court for taking kickbacks from a medical device company.

Michael Cobb, 42, of Wakefield, R.I., pleaded guilty before U.S. District Judge George O’Toole to violating the Anti-Kickback law.

Had the case proceeded to trial the Government’s evidence would have proven that between 2004 and 2011, Cobb, a physician’s assistant (PA), took kickbacks from a medical device company in return for ordering the company’s device. The device company manufactured bone growth stimulators, which are externally-worn medical devices that emit electromagnetic waves to the site of a spinal fusion. Cobb was a PA for a spinal surgeon in Rhode Island who prescribed bone growth stimulators for patients who underwent spinal fusion surgery. The surgeon had no preference which company’s bone growth stimulator was used and left this decision to Cobb, who was in a position to steer the stimulator business to whichever medical device company he chose.

Between 2004 and 2011, the device company paid Cobb for each bone growth stimulator that was ordered by the surgeon, with payments ranging from $50 to $300. Cobb never told the surgeon about the financial relationship with the device company. Cobb was paid approximately $120,000 between 2004 and 2011 for bone growth stimulator orders and in return, Cobb steered more than $1 million of reimbursement from insurance carriers to the device company, including approximately $350,000 in payments from federal insurance carriers.

In addition, Cobb committed perjury during his testimony before a grand jury. Cobb falsely denied that he was ever paid by a territory manager who worked for the device company, and he lied by testifying that the surgeon he worked for was aware of the financial arrangement with the device company.

Judge O’Toole scheduled sentencing for July 19th. Cobb faces up to five years in prison, to be followed by three years of supervised release and a fine of $250,000.

United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General in New England, made the announcement. The case is being prosecuted by Assistant U.S. Attorneys David Schumacher and Jeremy Sternberg of Ortiz’s Health Care Fraud Unit.



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