Smith & Nephew has entered into a deferred prosecution agreement with the Department of Justice over payments it made that were in violation of the Foreign Corrupt Practices Act, the Department of Justice said today.
The company acknowledged responsibility for its affiliates, subsidiaries, employees and agents who made the improper payments to publicly employed health care providers in Greece in order to secure lucrative business.
According to the case, certain Smith & Nephew executives, employees and affiliates, agreed to sell products at full list price to a Greek distributor, and then pay the amount of the distributor discount to an offshore shell company controlled by the distributor.
Between 1998 and 2008, $9.4 million in payment was authorised by Smith & Nephew to the distributor’s shell companies, some or all of which was passed on to physicians to “corruptly induce them to purchase medical devices manufactured by Smith & Nephew,” according to the Department of Justice.
Smith & Nephew has also reached a settlement with the U.S. Securities and Exchange Commission, under which the company will pay $5.4 million.
“We have what I believe to be a world-class compliance program, having enhanced it significantly since this investigation began in 2007,” CEO Olivier Bohuon said in prepared remarks. “These legacy issues do not reflect Smith & Nephew today. But they underscore that we must remain vigilant every place we do business and let nothing compromise our commitment to integrity.”