By David Ingram
WASHINGTON, Oct 17 (Reuters) - Boston Scientific Corp agreed to pay $30 million to settle allegations that theGuidant unit it acquired in 2006 knowingly sold defective heartdevices implanted in Medicare patients, the U.S. JusticeDepartment said on Thursday.
Guidant from 2002 to 2005 sold the implantabledefibrillators even though it knew they could short-circuit andbecome ineffective at correcting heartbeat rhythms, thedepartment said in a statement.
In 2010, similar allegations led Boston Scientific to pleadguilty to two misdemeanor charges of withholding informationfrom the U.S. Food and Drug Administration (FDA) and agree topay $296 million in fines.
The latest settlement resolves a civil lawsuit the JusticeDepartment brought in 2011 under a law designed to recover moneydefrauded from government programs such as Medicare.
Boston Scientific spokesman Peter Lucht said: "While thecompany continues to deny the allegations made in the complaint,it felt it was in the best interests of all parties to settlethis matter and avoid further protracted litigation."
Boston Scientific bought Guidant for $27 billion in 2006.
Guidant did not fully disclose to doctors and the FDA theproblems with its heart devices until May 2005 after it wascontacted by a New York Times reporter, according to thegovernment's suit.
James Allen, a patient who received one of the devices andwho initially brought the civil suit under the anti-fraud FalseClaims Act, will receive $2.25 million as a whistleblower, thedepartment said.
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