(Mealey's) - Johnson & Johnson (J&J) and
subsidiary DePuy International Ltd. will pay $76.9 million to resolve criminal
and civil allegations in the United States and in the United Kingdom that they
paid kickbacks to doctors in Greece, Poland, Romania and Iraq to use the
companies' drugs and medical devices, authorities announced April 8.
The U.S. Justice Department said J&J agreed to pay a
$21.4 million criminal penalty as part of a deferred prosecution agreement for
improper payments by J&J subsidiaries to public health care providers in
Greece, Poland and Romania in violation of the Foreign Corrupt Practices Act
(FCPA). The Justice Department said the agreement also resolves kickbacks
paid to the former Iraq government under the United Nation's Oil for Food
The Justice Department said it filed a criminal complaint
in the U.S. District Court for the District of Columbia against DePuy Inc. for
conspiracy and violations of the FCPA.
The Justice Department, Securities and Exchange
Commission and the United Kingdom's Serious Fraud Office each said that J&J
self-reported the violations to them and its cooperation was taken into
consideration in determining the resolution of the investigations and the fine
and settlement amounts. The Justice Department said the defendants'
timely disclosure, self-investigation and "extraordinary cooperation" helped
with the department's "industry-wide investigation."
Due to its "pre-existing compliance and ethics programs,
extensive remediation, and improvement of its compliance systems and internal
controls," the Justice Department said Johnson & Johnson will not be
required to retain a federal monitor but must make six-month reports on the
progress of its remediation and compliance efforts.
On April 8, the SEC filed a civil complaint against
Johnson & Johnson in the U.S. District Court for the District of Columbia,
alleging that the company's subsidiaries and employees paid bribes to publicly
employed doctors in Greece, Poland, and Romania and that they paid kickbacks in
Iraq to get contracts under the U.N. Oil for Food Program.
The SEC alleges violations of the Securities and Exchange
Act of 1934.
At the same time the complaint was filed, the SEC said
the company agreed to disgorge $38.2 million in profits and pay $10.4 million
in prejudgment interest.
Also on April 8, the U.K. Serious Fraud Offices announced
that DePuy International Ltd., based in Leeds, England, agreed to pay $6.9
million plus prosecution costs for paying 20 percent kickbacks to Greek doctors
in exchange for using the company's orthopedic devices.
The Serious Fraud Office said Greek authorities have
frozen $8.3 million in assets of DePuy Hellas, a DePuy Greek subsidiary.
[Editor's note: The SEC complaint is available at www.mealeysonline.com or
by calling the Customer Support Department at 1-800-833-9844. Document
#28-110421-002Z. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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