Processing Magazine

Johnson & Johnson cheated out of $777,000

February 6, 2006

A medical device supplier from Louisiana recently admitted in U.S. District Court that he cheated Johnson & Johnson of $777,000 in rebates that his company did not merit. Gerald Tauzier, president of Lee Medical International, pleaded guilty to a single charge of wire fraud regarding unwarranted rebates received from 2001 to 2003, the Associated Press reports. Tauzier, 59, of Kenner, La., faces up to five years in federal prison and a fine of up to twice the value of the fraud, said Assistant U.S. Attorney Bohdan Vitvitsky. Tauzier, who will also be ordered to repay the full amount of the fraud, said he had directed that false reports be filed with a J&J unit in Piscataway that made it appear Lee Medical sold J&J devices to buyers that would generate a rebate for his company. As a distributor, Lee Medical purchased medical devices from J&J, and could get rebates if it sold the devices to certain groups, such as a set of hospitals that had negotiated lower prices because it would buy large amounts of equipment. Tauzier remains free on $100,000 bond pending sentencing May 26.