Philips North America to pay $4.2M to resolve False Claims Act violations

  • Published
  • By Department of Justice, U.S. Attorney’s Office, District of Massachusetts

Philips North America LLC (Philips) has agreed to pay approximately $4.2 million to resolve allegations that it substituted key components of a mobile patient monitoring device, called an MP2, that it sold to military purchasers without recertifying the MP2 for military airworthiness.

Headquartered in Cambridge, Mass., Philips, among other things, manufactures medical devices, including MP2s, for sale to the federal government, including to U.S. military customers.

According to the settlement agreement, from Jan. 1, 2012 through Nov. 27, 2018, Philips sold MP2s to the U.S. Air Force, U.S. Army, U.S. Navy and the Defense Logistics Agency. These agencies require airworthiness and safe-to-fly testing and certification on medical devices used in certain aircraft environments.

Airworthiness and safe-to-fly testing by U.S. military agencies is necessary to ensure that a medical device does not adversely affect the operation of aircraft systems, and conversely, that the aircraft does not adversely affect the proper operation and efficacy of the medical equipment.

Philips admits that, after receiving initial airworthiness and safe-to-fly certifications for the MP2 from the U.S. Army in 2008 and the U.S. Air Force in 2011, Philips made modifications to the MP2 but did not adequately notify the relevant military testing facilities to determine whether the device modifications required retesting for certification. As a result, the United States contends that it has civil claims against Philips for submitting or causing the submission of false claims to the U.S. military.

United States Attorney Rachael S. Rollins; Patrick Hegarty, Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; Michael Wiest, Special Agent in Charge of the Naval Criminal Investigative Service, Northeast Field Office; Special Agent in Charge William Richards, Air Force Office of Special Investigations, Office of Procurement Fraud Investigations (PF); and Michael Conner, Resident Agent in Charge of the U.S. Army Criminal Investigation Division made the announcement today.

“I congratulate SA Andrew Stevens and the team at PF Det(achment) 6, O(perating) L(ocation) A(lpha), (Hanscom Air Force Base, Mass.), for this solid result on a three-year investigation,” said Richards.

Assistant U.S. Attorneys Lindsey Ross and Diane Seol, of Rollins’ Affirmative Civil Enforcement Unit, handled the matter.