In recent years, Fresenius Medical Care made headlines for bribes paid in Angola and Saudi Arabia and for shoddy bookkeeping in several other countries. In light of these and other irregularities, the U.S. Department of Justice (DOJ) is monitoring the German-based company’s actions here in the U.S. after cutting a deal in 2019 with DOJ and Securities Exchange Commission where it agreed to pay $231 million in penalties. Fresenius is known for its dialysis clinics and products.
Repeatedly reported possible misconduct
The Wall Street Journal reports that the former general counsel for the North American unit alleges the company dismissed him in March for reporting misconduct. He has filed a lawsuit in May Suffolk Superior Court in Boston. Hired in 1997, Douglas Kott became general counsel in 2012. He claims that he repeatedly reported instances of possible misconduct. These include:
- He launched a 2012 bribery investigation in an attempt to resolve issues between the company and federal authorities.
- He alleged that there was misconduct in 2014 that violated U.S. securities law. He reported that information to the company’s compliance department. These claims involved the company’s alleged attempts to avoid laws designed to prevent healthcare companies from giving kickbacks to federally funded service providers.
- He claims that he learned in 2016 of possible embezzlement and corporate waste, which he also reported to the company’s compliance department.
There were other whistleblower actions as well.
Demoted in 2016
Kott was demoted from general counsel in 2016 and placed in a legal operations position. He went from a supervisory position overseeing 75 employees to one role where he had one person on his staff. The change also meant that Kott no longer had meaningful oversight and compliance duties. His dismissal in 2022 was allegedly a violation of Massachusetts employment law and his employment contract.