Federal Judge Trebles Damages and Imposes Civil Penalties Against Cape Girardeau Surgeon and His Fiancee in the Amount of $5,495,931
St. Louis, MO – A civil judgment in the amount of $5,495,931 was entered today in favor of the United States against Dr. Sonjay Fonn and Ms. Deborah Seeger of Cape Girardeau, Missouri, and their professional corporations DS Medical and Midwest Neurosurgeons. Previously, in November 2017, a federal jury sitting in St. Louis, Missouri found that the couple conspired to violate the civil False Claims Act and also violated the False Claims Act and the Medicare Anti-Kickback statute.
The Government’s complaint and evidence at trial established that Dr. Fonn was a neurosurgeon during 2009-12. Dr. Fonn used spinal implants during the spinal fusion surgeries that he performed. Dr. Fonn practiced through his professional corporation Midwest Neurosurgeons. Ms. Deborah Seeger, who has been Dr. Fonn’s fiancé since 2008, started a spinal implant distributorship business called DS Medical in November 2008. Dr. Fonn then used DS Medical as his spinal implant distributor for most of the spinal implants he chose to implant during his surgeries from 2009-12. Many of Dr. Fonn’s patients had insurance coverage through Medicare and Medicaid, which are federal programs. The trial involved federal program payments for 228 spinal surgeries involving Medicaid and Medicaid patients.
Once DS Medical began operating, Ms. Seeger typically received 50% commissions on the implants Dr. Fonn used during his surgeries, meaning Dr. Fonn’s treatment choices directly impacted his fiance’s distributorship income. The evidence at trial established that when Dr. Fonn used expensive implants, or multiple implants during surgeries, her commission income increased. After Ms. Seeger received commission income through DS Medical, the evidence at trial established that Ms. Seeger spent some of that income to benefit Dr. Fonn through home improvements, a Sea Lion yacht, and many other purchases and expenditures. The United States alleged that that this conduct by defendants and their corporations violated the Anti-Kickback statute, a federal law that prohibits health care providers from making patient referrals in exchange for any direct or indirect benefits. Further, the United States alleged that this conduct violated the civil False Claims Act, in that defendants submitted or caused to be submitted claims for the surgeries and professional surgeries associated with these implants.
Through their verdicts, the federal jury agreed with the Government on 2/3 of the counts brought in the civil complaint from the case. The jury had made a number of findings in its verdict, including a $1,652,557 recovery to the Medicare and Medicaid program under the Government’s conspiracy claim, and a specific finding that each defendant conspired to submit 228 separate false claims to Medicare and Medicaid.
Typically, under federal law, damages are trebled under the False Claims Act. Courts also impose a statutory penalty of $5,500 to $11,000 for each false claim. Accordingly, the total amount of defendants’ civil liability was determined by the Court through the judgment issued today after the parties filed briefs, using the factual findings from the jury’s verdict.
Today’s judgment resolves a lawsuit that was filed by several Cape Girardeau, Missouri doctors and health care providers under the qui tam or “whistleblower” provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The case is captioned United States ex rel. Cairns et al. v. DS Medical et al., Case No. 1:12-CV-0004 AGF. The United States appreciates the relators’ interest in program integrity, and their assistance with this successful outcome. Defendants could further be liable for additional sums beyond the judgment issued today, including the costs of the lawsuit and attorneys’ fees of the relators.
The case was jointly handled by the U.S. Attorney’s Office and the Civil Frauds section of the Commercial Litigation Branch of the U.S. Department of Justice in Washington, D.C. The case was investigated by the Federal Bureau of Investigation, the Office of Inspector General for the U.S. Department of Health and Human Services, and the Medicaid Fraud Control Unit of the Missouri Attorney General’s Office.