SUMMARY:
A former MiMedx employee has filed counterclaims against the company, alleging that MiMedx engaged in predatory sales practices and incentivized fraud, including Medicare fraud. The employee, Caralyn Gargan, left the company after becoming concerned about MiMedx’s continued sales of a product that had not been approved by the FDA. The counterclaims come in response to MiMedx’s lawsuit against 10 former employees, including Gargan, alleging breaches of contractual obligations.
PRESS RELEASE
DEFENDANT FIGHTS BACK AGAINST MiMEDX “BLATANT INTIMIDATION” NON-COMPETE SUIT (press release)
One of 10 defendants who were sued earlier this year by MiMedx Group, Inc. (NASDAQ: MDXG) today filed counterclaims against the placental biologics company. Caralyn Gargan, a former MiMedx employee, filed the action against MiMedx for “predatory sales practices” and “incentivized fraud, including Medicare fraud.” Gargan also formally presented her answers and defenses to MiMedx’s lawsuit which claimed that the 10 former employees, who recently left the company, allegedly breached their contractual obligations to MiMedx. The filing describes the MiMedx suit as a “blatant intimidation tactic.”
Specifically, the counterclaims by Gargan allege that MiMedx “engaged in and has directed members of its sales team including [the former employee] to engage in, predatory sales practices aimed at increasing its revenue by incentivizing fraud on the United States government, including Medicare fraud.”
The claims reference a warning letter issued by the FDA to MiMedx’s CEO, Joseph H. Capper, concerning its AXIOFILL product on December 20, 2023, and assert that the former employee and others “became increasingly uncomfortable about MiMedx senior leadership’s direction to sell AxioFill, even though it had not been approved by (or even submitted to) the FDA for FDA Premarket Approval.”
The claims filed by Gargan’s attorneys at Mintz and Fellows Labriola allege that she left MiMedx after “MiMedx tried to compel its employees to continue selling a product that the U.S. Food and Drug Administration (‘FDA’) determined could not lawfully be marketed without prior FDA approval.”
Today’s counterclaims come on the heels of another filed earlier this month on behalf of another former MiMedx employee, Lora Whooley. To read the Gargan claim please click HERE. To read the Whooley claim, please click here HERE.