Medical device manager sentenced to prison for scheme to defraud hospitals of $800,000

TRENTON – A regional manager selling medical devices to hospitals for Integra LifeSciences Corp. of Plainsboro, New Jersey, was sentenced to prison today for his role in a scheme to defraud hospitals of more than $800,000, U.S. Attorney Paul Fishman announced.

Daniel Metz, 34, of Fairfield, was sentenced to nine months in prison and nine months of home confinement. Additionally, Charles B. Carey Jr., 35, of Clark, whose cooperation led to Metz’ conviction, was sentenced to three years of probation. Metz and Carey previously pleaded guilty before U.S. District Judge Joel Pisano to separate informations charging them with conspiracy to commit wire fraud.

According to documents filed in this case and statements made in court: Integra is a provider of orthopedic products, including devices and implants for the spine, foot and ankle, hand and wrist, and shoulder and elbow. Metz worked there from July 2005 until his termination in April 2013, first as a product specialist — also referred to as a sales representative — and then as Northeast regional manager, supervising 16 product specialists and assistant sales representatives in Massachusetts, New Jersey, New York, and Pennsylvania.

Carey was a product specialist, reporting to Metz, from January 2009 until he resigned in April 2011.

Product specialists at Integra were responsible for calling on surgeons to increase sales volume and were routinely present during surgeries. When present during surgeries, product specialists brought with them consignment trays with pre-packaged Integra products available to surgeons, as well as surgery-specific products.

Integra billed the hospitals and surgery centers for the products used and product specialists, and their supervisors, were compensated based on salary, sales target-based commission and bonuses.

Metz admitted he used various fraudulent methods to overcharge hospitals and surgery centers. He would sometimes charge for a greater quantity or a more expensive product than was actually used, increasing his compensation and improving his employment evaluations.

Metz and Carey admitted that after Metz became regional manager, he taught at least some of the fraudulent methods to product specialists working for him, including Carey, who sometimes employed those methods.

Metz and Carey fraudulently caused medical facilities to pay more than $800,000 in inflated bills.

In addition to the prison term and home confinement, Pisano sentenced Metz three years of supervised release. As part of their plea agreements, Metz and Carey will forfeit $100,000 and $77,000, respectively, representing the amounts of money they personally made through the fraud scheme. The defrauded hospitals have been reimbursed by Integra for the fraudulent charges.

Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses.

Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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