Zimmer Biomet Breached Deferred Prosecution Deal, Government Says
July 28, 2016 at 4:25 p.m.
By Staff Report-
In a status report filed in federal court in Washington, D.C., June 6, the U.S. Department of Justice said Biomet breached the agreement through activity in Brazil and Mexico that it disclosed in 2014, and by failing maintain a corporate compliance program, according to massdevice.com
It also reported the finding means the company could face criminal prosecution, though the Justice Department said the company had pledged to cooperate.
Warsaw-based Biomet is now called Zimmer Biomet Holdings Inc. after being acquired by Zimmer Holdings in 2015.
Biomet entered into the deferred prosecution agreement to settle allegations that it paid bribes to state-employed healthcare providers in Argentina, Brazil and China in order to secure business with hospitals, the Justice Department said in 2012. Biomet disguised those payments in its financial reports as “commissions,” “consulting fees,” “royalties” and “scientific incentives,” massdevice.com reported.
The company also agreed to pay a $17.3 million criminal penalty, along with a $5.4 million civil settlement to the U.S. Securities and Exchange Commission, and to maintain a compliance program to prevent future misconduct.
The Justice Department said Biomet’s conduct violated the Foreign Corrupt Practices Act, which prohibits bribery of foreign officials. It agreed not to prosecute the company if it abided by the deal for three years.
However, the agreement has since been extended for two successive years as prosecutors have continued to investigate Biomet’s conduct.[[In-content Ad]]
In a status report filed in federal court in Washington, D.C., June 6, the U.S. Department of Justice said Biomet breached the agreement through activity in Brazil and Mexico that it disclosed in 2014, and by failing maintain a corporate compliance program, according to massdevice.com
It also reported the finding means the company could face criminal prosecution, though the Justice Department said the company had pledged to cooperate.
Warsaw-based Biomet is now called Zimmer Biomet Holdings Inc. after being acquired by Zimmer Holdings in 2015.
Biomet entered into the deferred prosecution agreement to settle allegations that it paid bribes to state-employed healthcare providers in Argentina, Brazil and China in order to secure business with hospitals, the Justice Department said in 2012. Biomet disguised those payments in its financial reports as “commissions,” “consulting fees,” “royalties” and “scientific incentives,” massdevice.com reported.
The company also agreed to pay a $17.3 million criminal penalty, along with a $5.4 million civil settlement to the U.S. Securities and Exchange Commission, and to maintain a compliance program to prevent future misconduct.
The Justice Department said Biomet’s conduct violated the Foreign Corrupt Practices Act, which prohibits bribery of foreign officials. It agreed not to prosecute the company if it abided by the deal for three years.
However, the agreement has since been extended for two successive years as prosecutors have continued to investigate Biomet’s conduct.[[In-content Ad]]
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