Ex-Chief Saleaumua rewarded for whistleblowing
One of the nation’s largest pharmaceutical distributors will to
pay $8 million to settle claims that it violated federal law by
doling out $440,000 to lure business from pharmacies owned by
former Kansas City Chiefs player Dan Saleaumua, prosecutors said
Cardinal Health Inc., which is based in Dublin, Ohio, agreed to
pay the government as part of a lawsuit filed by Saleaumua and
consultant Kevin Rinne, the Department of Justice said. A company
spokeswoman said Cardinal denied wrongdoing but agreed to the
settlement to avoid an expensive legal fight.
Prosecutors said Cardinal, which was the franchisor of
Saleaumua’s seven Medicine Shoppe pharmacies, caused Saleaumua to
accept a deal that he didn’t know was illegal kickback. He and
Rinne will share $760,000 for blowing the whistle on the
“American taxpayers are the victims of illegal kickback schemes
that result in Medicare and Medicaid paying millions of dollars
more than they should for prescription drugs,” said U.S. Attorney
Beth Phillips in Kansas City. “Today’s $8 million settlement
underscores our commitment to combatting health care fraud and
Cardinal maintains that the payments weren’t kickbacks and
didn’t increase costs to the government, spokeswoman Corey Kerr
said. Cardinal is the nation’s third-largest distributor of
pharmaceuticals, medical, lab and surgical products.
Saleaumua Inc., the company that owned the Kansas City
pharmacies, was receiving its drugs from distributor McKesson Corp.
when a Cardinal representative contacted Saleaumua in January 2006,
to see if the company was interested in switching distributors,
according to the Justice Department.
As part of the deal, Cardinal said it would give the company,
known as SI, an additional 2.3 percent discount off normal
wholesale prices for the drugs purchased. SI declined because of
possible costs and logistical headaches associated with moving to a
new distributor, prosecutors said.
Soon afterward, Cardinal sweetened its offer to include the 2.3
percent discount and $50,000 in cash to make the switch. After SI
declined again, the offer was raised to $100,000, which SI
When Saleaumua contacted McKesson to inform the company of the
switch, McKesson offered $150,000 to SI to keep its business.
The next day, Cardinal offered $300,000 to switch, then McKesson
offered $400,000. Cardinal countered with $300,000 in cash and
$140,000 toward purchase of Cardinal’s PDX inventory tracking
system. Saleaumua accepted that offer and switched
The government alleges that the kickback skewed the formula used
to determine the amount Saleaumua’s pharmacies received in Medicaid
and Medicare reimbursements, and caused SI to violate the
But neither Saleaumua nor Rinne, the SI consultant, knew it was
illegal to accept what Cardinal had characterized as an upfront
Kerr, the Cardinal spokeswoman, said her company believes it
would have prevailed in court but wanted to avoid an expensive
“We don’t believe that payment was a kickback,” she said. “That
transaction didn’t result in the government paying more than it was
obligated to pay for pharmaceuticals provided by the customer to
federal health care program beneficiaries.
“It’s an upfront discount to a retail independent customer,” she
said. “That $440,000, it’s a payment we believe is legitimate and
legal and complied with applicable law.”
Saleaumua played for the Kansas City Chiefs from 1989 through