DA O'Malley Announces $1.125 Million Settlement in Healthcare Marketing Fraud Lawsuit

OAKLAND -- Alameda County District Attorney Nancy E. O’Malley announced today that Benjamin Altadonna, D.C., a Danville, California chiropractor and marketing consultant, was ordered to pay $1,125,000.00 to settle a multi-jurisdictional prosecution arising out of his role in a nationwide, health care marketing fraud.

The Alameda County District Attorney, along with the District Attorneys of Contra Costa, Marin, Monterey, Napa, Orange, Santa Clara, Santa Cruz, Shasta, Solano, and Sonoma counties had filed a civil lawsuit in 2010 to enjoin Altadonna from engaging in false and misleading advertising, and unfair business practices relating to the marketing of a healthcare device known as the DRX-9000. The DRX-9000 was a spinal traction device.

The complaint alleged that Altadonna, and his company, Altadonna Communications, Inc., falsely promoted the DRX-9000 as “patented,” “breakthrough medical technology,” “approved by the FDA,” and “developed by NASA.” All of these claims were false. The DRX-9000 was merely a motorized traction device for the treatment of low back pain.

District Attorney O’Malley stated, “In California, health care professionals have a duty to verify claims used to promote their services. We will not tolerate predatory marketing techniques by health care professional aimed at unsuspecting and vulnerable patients.”

O’Malley added, “Consumers should be wary of products and services that make unrealistic healthcare claims that sound too good to be true and lack adequate substantiation.”

The District Attorneys’ investigation revealed that Altadonna received commissions from the manufacturer of the DRX-9000 to sell the device to health care professionals. Altadonna created and sold “professional practice building” products to healthcare professionals. He used the DRX-9000 as a centerpiece for his professional clients and taught them how to pressure patients to commit to advance purchases of expensive treatments on the DRX-9000. Altadonna’s marketing materials targeted a vulnerable class of patients including those suffering from chronic, severe back pain.

The final judgment, signed on March 20, 2012, by the Honorable Judge Steven Brick, permanently enjoins Dr. Altadonna from violating or assisting others in violating California’s health care marketing laws. In addition to the payment of $1,125,000.00 in civil penalties, costs and restitution, the settlement requires Altadonna to comply with strict injunctive terms to prevent any future unfair or deceptive business practices.

Deputy District Attorney Scott Patton handled the case for Alameda County.

Posted on Mar 27, 2012