Medical device maker Biomet Inc. has agreed to pay a $17.2 million criminal penalty in a foreign bribery case, the U.S. Justice Department said today.
Biomet, represented by Kirkland & Ellis and Ropes & Gray, entered a deferred prosecution agreement (PDF) with federal prosecutors. The Indiana-based company also settled with the U.S. Securities and Exchange, agreeing to pay $4.4 million in disgorgement and $1.1 million in prejudgment interest.
The U.S. Securities and Exchange Commission said subsidiaries and agents of Biomet bribed public doctors in Argentina, Brazil and China for nearly a decade.
“Biomet’s misconduct came to light because of the government’s proactive investigation of bribery within the medical device industry,” Kara Novaco Brockmeyer, chief of the SEC enforcement division’s Foreign Corrupt Practices Act unit, said in a statement. “A company’s compliance and internal audit should be the first line of defense against corruption, not part of the problem.”
Kirkland’s Laurence Urgenson, a white-collar defense partner in the firm’s Washington office, and Asheesh Goel, a Ropes & Gray securities partner, declined to comment this afternoon on the deal reach with prosecutors and securities regulators. A Biomet spokesman was not immediately reached for comment.
Justice Department lawyers, including Kathleen Hamann, a Fraud Section trial attorney, said in court papers that Biomet and its subsidiaries made unlawful payments from 2000 to 2008 to public health care providers to secure business. DOJ said more than $1.5 million in direct and indirect corrupt payments were made during that time.
The criminal prosecution is part of a wider bribery investigation involving medical device companies. Johnson & Johnson, in addition to Smith & Nephew Inc., also paid criminal penalties and entered deferred prosecution agreements.