Prosecutors Seek Records in Medtronic Fraud Probe

The company faces a subpoena in a federal fraud investigation involving surgeon and former consultant Dr. Timothy Kuklo.

By THOMAS LEE, Star Tribune
Last update: June 23, 2009 - 8:56 PM

Federal prosecutors have subpoenaed Medtronic Inc. over documents relating to a bone growth study authored by a former U.S. Army surgeon suspected of fraud.

The U.S. Attorney's Office in Massachusetts also ordered the Fridley-based medical device giant to turn over information about "contracts, research grants, speaking and education programs, and payments for certain named physicians," according to documents filed Tuesday with the Securities and Exchange Commission.

The company said it will comply with the subpoena.

Congressional and federal investigators have been examining the financial ties between Medtronic and Dr. Timothy Kuklo, a former surgeon at the Walter Reed Medical Center in Washington, D.C.

Overstated benefits

Kuklo is accused of making false claims about the use of the company's Infuse bone-growth product to treat bone and spine injuries in soldiers hurt in Iraq. At the time, he was a paid consultant to Medtronic.

Medtronic spokeswoman Marybeth Thorsgaard declined to confirm whether the subpoena, which the company received in May, specifically targeted Kuklo.

Officials at Walter Reed said an investigation found that a study conducted by Kuklo and others overstated the product's benefits in healing bones shattered in warfare. The study was published in a British medical journal, which later retracted it.

Medtronic has confirmed that Kuklo became a consultant in August 2006 but said his work for the company was not related to the Walter Reed study. The company has acknowledged it paid Kuklo $800,000 for consulting services. He remained a consultant with Medtronic until early May.

Companies often hire doctors to provide insight into how well their devices work and how they might be improved. However, those relationships, some of which involve thousands of dollars, have drawn the attention of Sen. Charles Grassley, R-Iowa, and former U.S. Attorney Michael Sullivan in Boston.

Thomas Lee - 612-673-7744