MiMedx agrees to pay $6.5 million to end fraud inquiry

MiMedx Group admitted to no wrongdoing but agreed to pay $6.5 million to resolve a case in which the company was charged with knowingly giving false pricing information to the U.S. Department of Veterans Affairs.

“Government contractors will not be permitted to profit improperly at the expense of taxpayers,” Jody Hunt, assistant attorney general of the U.S. Justice Department’s civil division, said in a statement issued Monday.

The Marietta-based company, which makes and sells human tissue grafts, cooperated with the investigation, according to the Justice Department announcement.

In a company statement, MiMedx said it did not admit to the allegations, despite agreeing to pay $6.5 million “to resolve the matter.”

“We are happy to have this investigation behind us,” said Timothy Wright, the company’s chief executive officer. “Transparency, cooperation and disclosure are enabling us to resolve historical issues and focus our efforts toward the future. This is another important step in that effort.”

The original allegations were brought in a lawsuit filed by former MiMedx sales representatives under “whistleblower” provisions of the False Claims Act.

As previously reported in the AJC, federal authorities investigated MiMedx for more than two years before laying blame for the violations on Parker “Pete” Petit, the company’s former chairman and chief executive.

Petit, a politically connected business leader and philanthropist, was accused of orchestrating a number of schemes meant to inflate revenues and keep the price of the company stock high.

The fraud went on for years, prosecutors said. William Taylor, former chief operating officer, took part in the schemes, prosecutors alleged. Both Petit and Taylor denied the allegations.

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