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$22.8 Million FCPA Fine is Part of $646 Million Penalty on Medical Equipment Company

Friday, March 04, 2016
Sandler, Travis & Rosenberg Trade Report

The Department of Justice announced March 1 that a medical equipment company will pay $22.8 million as part of a deferred prosecution agreement resolving criminal charges that it violated the Foreign Corrupt Practices Act by bribing health officials in Central and South America. A DOJ official said this behavior mirrored the company’s conduct in the U.S., for which it is being assessed a separate $623.2 million penalty.

The DOJ states that from 2006 until August 2011 the company implemented a plan to increase sales in Central and South America by bribing health care practitioners at government-owned health care facilities with cash, money transfers, personal grants, personal travel, and free or heavily discounted equipment. The primary method used to deliver these illicit benefits was “training centers” nominally set up to educate and train doctors. The payments totaled nearly $3 million and yielded more than $7.5 million in profits.

In addition to the penalty, the DPA requires the company to retain a compliance monitor for three years and implement a number of compliance measures. The DOJ states that the company did not voluntarily disclose the misconduct in a timely manner but did receive a 20 percent penalty reduction for its cooperation, including its extensive internal investigation, translation of numerous foreign language documents, and collection, analysis and organization of voluminous evidence.

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