PRESS RELEASE

FOR IMMEDIATE RELEASE

For more information, contact:

June 24, 2015

Charles F. Kester, Esq.

Delaney Kester LLP
Tel: 818-974-8627
charles@delaneykester.com
Ilyas J. Rona, Esq.
Delaney Kester LLP
Tel: 617-671-9510
ilyas@delaneykester.com

Multimillion-Dollar Insurance Fraud Lawsuit against

Johnson & Johnson Announced in California
CALABASAS, CA JUNE 24, 2015Delaney Kester LLP announces that it is
bringing a multimillion-dollar insurance fraud lawsuit against Johnson &
Johnson and its subsidiary Acclarent, Inc. in Los Angeles Superior Court. The
lawsuit seeks damages in connection with the MicroFlow Spacer, a medical
device marketed by Johnson & Johnson and Acclarent to treat sinusitis.
The whistleblower complaint which is brought under California Insurance
Code 1871.7 by a former employee of Johnson & Johnson and Acclarent
alleges that the MicroFlow Spacer was only on the market because of false
statements made to the FDA. As a result, all costs associated with the device
were ill-gotten and the Johnson & Johnson and Acclarent caused health insurers
to pay claims that would not have been paid otherwise.
Johnson & Johnson claims to be the worlds largest medical device manufacturer.
In January 2010, Johnson & Johnsons subsidiary Ethicon purchased Menlo Park,
CA startup Acclarent for $785 million. Johnson & Johnson continued to sell
MicroFlow Spacers until 2013. Two months ago, the U.S. Department of Justice
announced an indictment against Acclarents former CEO William Facteau and
its Vice President of Sales Patrick Fabian for various counts of conspiracy, wire
fraud, and introducing adulterated or misbranded medical devices into interstate
commerce. The indictment alleges that Acclarents former executives
fraudulently increased company revenues by illegally marketing the MicroFlow
Spacer for uses not cleared or approved by the FDA. This increased revenue
came at the expense of public and private payors, including health insurance
companies. Delaney Kester LLP seeks to obtain compensation for private health

insurers and, by extension, the policyholders whose premiums increase anytime

fraud goes undetected in the healthcare system.
California Insurance Code 1871.7 allows interested persons to file complaints
targeting fraudulent billing to private insurers. The statute is modeled after the
federal False Claims Act (the FCA); but unlike the FCA, which seeks to recover
federal funds wrongly paid by programs such as Medicare and Medicaid, Section
1871.7 provides a remedy when private insurers are defrauded. As the California
Insurance Code observes, health insurance fraud is a particular problem for all
Americans. Although there are no precise figures, it is estimated that healthcare
fraud adds billions of dollars every year in unnecessary healthcare costs and
higher premiums across the country.
The complaint is brought by attorneys of Delaney Kester LLP, including Charles
F. Kester of Calabasas, California, and Royston H. Delaney and Ilyas J. Rona of
Boston, Massachusetts; and by attorneys of Kellogg, Huber, Hansen, Todd,
Evans & Figel, P.L.L.C., including Silvija A. Strikis and Joseph S. Hall of
Washington, D.C.
The media contacts listed at the top are available for interviews.
End