Former Integra LifeScience Employees Admit to Defrauding Hospitals

Federal prosecutors claim that two men who worked for Plainsboro, N.J.-based Integra LifeSciences Corp. have admitted to defrauding hospitals. Daniel Metz, 34, and 35-year-old Charles Carey Jr., pleaded guilty to conspiracy to commit wire fraud.

Integra LifeSciences is a manufacturer of orthopedic products, including devices and implants for the spine, foot and ankle, hand and wrist, and shoulder and elbow.

According to information from the office of U.S. Attorney Paul J. Fishman, Metz worked at Integra LifeSciences from July 2005 until his termination in April 2013, first as a product specialist (also referred to as a sales representative) and then as Northeast regional manager, supervising 16 product specialists and assistant sales representatives in Massachusetts, New Jersey, New York and Pennsylvania. Carey was a product specialist, reporting to Metz, from January 2009 until he resigned in April 2011.

Product specialists at Integra were responsible for calling on surgeons to increase sales volume and were routinely present during surgeries. When present during surgeries, product specialists brought with them consignment trays with pre-packaged Integra products available to surgeons, as well as surgery-specific products. Integra billed the hospitals and surgery centers for the products used and product specialists (and their supervisors) were compensated based on salary, sales target-based commission and bonuses. 

Metz admitted he used various fraudulent methods to overcharge hospitals and surgery centers. He would sometimes charge for a greater quantity or a more expensive product than was actually used, increasing his compensation and improving his employment evaluations.

Metz and Carey admitted that after Metz became regional manager, he taught at least some of the fraudulent methods to product specialists working for him, including Carey, who sometimes employed those methods.They caused medical facilities to pay more than $800,000 in inflated bills.

The count of conspiracy to commit wire fraud to which Metz and Carey pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Metz and Carey also agreed to forfeit $100,000 and $77,000, respectively, representing the amounts of money they personally made through the fraud scheme.

The defrauded hospitals have been reimbursed by Integra for the fraudulent charges, Fishman said.

Sentencing is scheduled for Jan. 20.