Biomet settles allegations it bribed providers

Biomet, a Warsaw, Ind.-based medical-device manufacturer, will pay nearly $23 million in settlements with the U.S. Justice Department and the Securities and Exchange Commission over allegations that the company bribed healthcare providers in Argentina, Brazil and China.

Between 2000 and 2008, the company and its subsidiaries, employees and agents paid more than $1.5 million in direct and indirect corrupt payments to publicly employed healthcare providers in the three countries in an effort to win business deals with hospitals, according to a Justice Department news release. These payments were then falsely recorded as commissions, royalties, consulting fees or scientific incentives, according to the release.

Biomet agreed to pay a nearly $17.3 million criminal penalty to the U.S. Justice Department. As specified in the deferred prosecution agreement with the department, the company must retain a compliance monitor for 18 months and implement new internal controls. The Justice Department will not prosecute Biomet in connection with the allegations if the company meets its obligations over the next three years, according to a separate news release from Biomet (PDF). Biomet's financial penalty was reduced as a result of its cooperation in the investigation, and the agreement recognizes the company's "thorough and wide-reaching self-investigation of the underlying conduct and the remedial efforts and compliance improvements undertaken," according to the release. Biomet also will pay $5.4 million in disgorgement of profits to the SEC, according to the Justice Department release.

"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 Department of Justice and Securities and Exchange Commission to bolster our (Foreign Corrupt Practices Act) compliance practices and procedures," Biomet President and CEO Jeffrey Binder said in the company's news release.