A medical device manufacturer and two top executives agreed to pay a total of $12 million to settle allegations originally brought by a whistleblower that they paid kickbacks to physicians.

Innovasis; Brent Felix, president and founder of the company; and Garth Felix, chief financial officer, violated the False Claims Act by paying kickbacks to spine surgeons to induce them to use Innovasis’s spinal devices, the Department of Justice (DOJ) alleged in a settlement agreement published Wednesday.

From January 2014 through December 2022, Innovasis provided payments, such as consulting fees, intellectual property acquisition, licensing fees, performance shares, and other examples, to 17 orthopedic surgeons and neurosurgeons as an inducement for them to use Innovasis spinal implants and other devices, the DOJ said. The alleged payments were suspicious because they were higher than what would be expected. Some payments were made but services were never performed and intellectual property never provided.