3rd med­i­cal sup­ply firm agrees to set­tle­ment

Biomet’s pay­ments abroad im­proper

The Washington Times Daily - - Business - BY JERRY SEPER

Med­i­cal de­vice maker Biomet Inc. has agreed to pay the gov­ern­ment more than $22 mil­lion as part of an agree­ment with the Jus­tice Depart­ment to re­solve im­proper pay­ments made by the com­pany and its sub­sidiaries in vi­o­la­tion of the For­eign Cor­rupt Prac­tices Act (FCPA).

The Jus­tice Depart­ment’s Crim­i­nal Di­vi­sion an­nounced Mon­day that the In­di­ana-based com­pany, which man­u­fac­tures and sells med­i­cal de­vices world­wide, made var­i­ous im­proper pay­ments or paid bribes from 2000 to 2008 to health care providers in Ar­gentina, Brazil and China to se­cure lu­cra­tive busi­ness with hos­pi­tals.

Dur­ing this time, ac­cord­ing to in­for­ma­tion filed in U.S. Dis­trict Court in Washington, more than $1.5 mil­lion in di­rect and in­di­rect pay­ments were made. In ad­di­tion, at the end of each fis­cal year, Biomet, its ex­ec­u­tives, em­ploy­ees and agents falsely recorded the pay­ments on its books and records as “com­mis­sions,” “roy­al­ties,” “con­sult­ing fees” and “sci­en­tific in­cen­tives” to con­ceal the na­ture of the pay­ments, the gov­ern­ment said.

The mat­ter was part of an in­ves­ti­ga­tion into bribery by med­i­cal-de­vice com­pa­nies of health care providers and ad­min­is­tra­tors em­ployed by gov­ern­ment in­sti­tu­tions. Pre­vi­ously, John­son & John­son and Smith & Nephew Inc. agreed to pay crim­i­nal penal­ties and en­tered into de­ferred pros­e­cu­tion agree­ments re­lated to the in­ves­ti­ga­tion.

As part of the agree­ment, Biomet will pay a $17.28 mil­lion crim­i­nal penalty and is re­quired to im­ple­ment rig­or­ous in­ter­nal con­trols, co­op­er­ate fully with the depart­ment and re­tain a com­pli­ance mon­i­tor for 18 months.

The agree­ment rec­og­nizes Biomet’s co­op­er­a­tion with the depart­ment’s in­ves­ti­ga­tion and the com­pany’s re­me­dial ef­forts and com­pli­ance im­prove­ments. In ad­di­tion, Biomet re­ceived a re­duc­tion in its penalty as a re­sult of its co­op­er­a­tion in the in­ves­ti­ga­tion of other com­pa­nies and per­sons.

In a re­lated mat­ter, Biomet reached a set­tle­ment Mon­day with the Se­cu­ri­ties and Ex­change Com­mis­sion un­der which the com­pany agreed to pay $5.4 mil­lion in prof­its, in­clud­ing pre-judg­ment in­ter­est.

This case was pros­e­cuted by trial at­tor­ney Kath­leen M. Ha­mann of the Crim­i­nal Di­vi­sion’s Fraud Sec­tion with as­sis­tance from the FBI’S Washington field of­fice’s ded­i­cated FCPA squad.

Biomet Pres­i­dent and CEO Jef­frey Binder said the com­pany has “sig­nif­i­cantly en­hanced” its com­pli­ance pro­ce­dures and fi­nan­cial con­trols in re­cent years.

“Mov­ing for­ward, we in­tend to con­tinue to ad­here to our en­hanced global com­pli­ance pro­ce­dures and to pro­mote the com­pany’s com­mit­ment to the high­est eth­i­cal stan­dards in all the mar­kets that we serve,” Mr. Binder said in a state­ment.

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