The world’s largest eyeglass lens manufacturer reached a settlement agreement for violations of the California Insurance Frauds Prevention Act.
WASHINGTON, December 05, 2022--(BUSINESS WIRE)--Today, the nationally recognized law firm of Baron & Budd announced a settlement of $23.8 million in a whistleblower lawsuit filed against eye glass lens manufacturer, Essilor Laboratories of America, for violations of the California Insurance Frauds Prevention Act. The lawsuit alleged the company paid hundreds of millions of dollars in kickbacks and other incentives to eye care providers (ECPs) in exchange for selling its expensive lens products. This follows a $22 million False Claims Act settlement against Essilor in August 2022 in which Baron & Budd also represented the whistleblower client.
The lawsuit also alleged that the company "engaged in a far-reaching scheme including the offer and/or payment of both ‘classic’ kickbacks – vast amounts of cash, trips, and lavish entertainment – as well as free and/or reduced-cost professional services including marketing support and business consulting. Essilor offered and/or provided these kickbacks to eyecare professionals for the purpose of buying loyalty and rewarding those who switched to Essilor products and optical laboratory services."
According to the suit, Essilor executed this scheme nationwide, including in the state of California, where it targeted and defrauded eyecare insurance companies and their insureds. These bribes caused the policyholders to pay more out-of-pocket costs for premium Essilor products and drove up the cost of benefits paid for by California insureds and their eyecare insurers.
The California Insurance Frauds Prevention Act ("IFPA") was implemented to combat abusive practices aimed at defrauding private insurers and their insureds. Similar to the federal False Claims Act, California’s IFPA allows private citizens to file a lawsuit against those who commit insurance fraud and share in a portion of the recovery. The whistleblower in this case was a former Essilor employee with inside information about the kickback scheme.
"Whistleblowers, like our client, are crucial in the process of identifying and prosecuting companies like Essilor that perpetuate schemes that defraud insured individuals," said Baron & Budd Shareholder Scott Simmer. "These schemes result in billions of dollars of added healthcare costs for people across the nation because of corporate greed. We are pleased that Essilor was held accountable for these blatant violations of IFPA."
Ricardo Lara, California Insurance Commissioner, intervened and prosecuted the case in a public/private partnership along with Baron & Budd and other private firms.
With more than 30 years of experience in Qui Tam cases, the attorneys on Baron & Budd’s whistleblower representation team have represented numerous clients in government fraud cases returning over $6.0 billion to federal and state agencies, with whistleblower recovery shares as high as 49%.
About Baron & Budd, P.C.
Baron & Budd, P.C. is among the largest and most accomplished plaintiffs’ law firms in the country. With more than 45 years of experience, Baron & Budd has the expertise and resources to handle complex litigation throughout the United States. As a law firm that takes pride in remaining at the forefront of litigation, Baron & Budd has spearheaded many significant cases for hundreds of entities and thousands of individuals. Since the firm was founded in 1977, Baron & Budd has achieved substantial national acclaim for its work on cutting-edge litigation, trying hundreds of cases to verdict and settling tens of thousands of cases in areas of litigation as diverse and significant as dangerous and highly addictive pharmaceuticals, defective medical devices, asbestos and mesothelioma, California wildfires and environmental contamination, fraudulent banking practices, e-cigarettes, motor vehicles, federal and state whistleblower cases, and other consumer fraud issues.
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