CSI faces allegations of kickbacks, illegal marketing tactics

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A former Cardiovascular Systems, Inc. (CSI) salesman has filed a lawsuit alleging the medical device maker participated in illegal marketing practices.

CSI filed an 8-K report with the U.S. Securities and Exchange Commission on July 8 when the complaint was unsealed. Travis Thams, an ex-employee, filed the lawsuit in federal court in North Carolina on July 15, 2013.

In its filing, CSI acknowledged that Thams’s lawsuit “alleged kickbacks and off-label promotion of medical devices and that this alleged conduct has resulted in false claims being submitted to obtain payment or reimbursement.”

Minneapolis' Star Tribune reported that the lawsuit was unsealed because the Department of Justice does not plan on intervening. However, the government would continue to investigate the allegations, which involve CSI's peripheral atherectomy devices.

Thams alleged that CSI sent doctors on free trips to seminars and told them to use CSI devices, according to the Star Tribune. The newspaper reported that Thams alleged CSI also sent complimentary products to doctors and made phony payments to doctors for speaking engagements.

“The Company maintains rigorous policies and procedures to promote compliance with the (False Claims Act) and other regulatory requirements and intends to vigorously defend this lawsuit, should it proceed,” CSI wrote in its 8-K filing. “However, the Company cannot predict when the Department of Justice’s investigation or this litigation will be resolved, the outcome of the investigation or this litigation, or the potential impact of either on the Company.”