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Biomet settles charges of Foreign Corrupt Practices Act violations


WASHINGTON—Medical device manufacturer Biomet Inc. has agreed to pay a $17.3 million criminal penalty to settle Department of Justice charges that it violated the Foreign Corrupt Practices Act.

The Warsaw, Ind.-based firm will pay another $5.4 million to the U.S. Securities and Exchange Commission to settle civil claims in the same matter, the Justice Department said Monday.

The Biomet probe was part of a DOJ investigation into bribery by medical device companies of health care providers and administrators employed by government institutions, according to the department. Biomet's deferred prosecution agreement with the DOJ follows previous agreements reached with New Brunswick, N.J.-based Johnson & Johnson and Memphis, Tenn.-based Smith & Nephew Inc., the DOJ said in its statement.

According to the DOJ, Biomet, its subsidiaries, employees and agents made various improper payments between 2000 and 2008 to publicly employed health care providers in Argentina, Brazil and China to secure lucrative business with hospitals. The DOJ said more than $1.5 million in “direct and indirect corrupt payments” were made.

The DOJ said that as part of the agreement, in addition to paying the penalty, Biomet is required to implement “rigorous” internal controls, cooperate fully with the department and retain a compliance monitor for 18 months.

The DOJ said the agreement recognizes Biomet’s cooperation with the department’s investigation, and that it had received a reduction in its penalty because of it.

“Biomet has long been committed to upholding the highest standards of ethical and legal conduct both in the United States and abroad,” Biomet President and CEO Jeffrey R. Binder said in a statement. “Over the past several years, we have significantly enhanced our global compliance procedures and financial controls, and we fully intend to work with the independent monitor and the (DOJ) and (SEC) to bolster our FCPA compliance practices and procedures.

“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.”

Earlier this month, Tulsa, Okla.-based BizJet International Sales & Support Inc. agreed to pay nearly $12 million in criminal penalties for violating the FCPA fines for bribing Latin American government officials to secure maintenance contracts.

For in-depth coverage of this topic and related issues, visit the Business Insurance Solution Arc on A World of Risk: Managing Foreign Bribery and Corruption.

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