United States v. Biomet, Inc. (D.D.C. 2012)

• Case Name
• United States v. Biomet, Inc. (D.D.C. 2012)

• Date Filed
• 03/26/2012

• Enforcement Agency
• DOJ

• Countries
• Argentina, Brazil, China

• Foreign Official
• Health care providers employed by publicly-owned and operated hospitals in Argentina, Brazil, and China.
   

• Date of Conduct
• 2000 to 2008

• Nature of Business
• Biomet, Inc. is a manufacturer of orthopedic medical devices.  Biomet is incorporated in Indiana and has its principal place of business in Warsaw, Indiana.
   

• Influence to be Obtained
• From approximately 2000 to 2008, Biomet, its subsidiaries, employees, and agents made various improper payments to health care providers employed at publicly owned and operated hospitals in Argentina, Brazil, and China to secure lucrative business for sales of Biomet products to hospitals.  Biomet conducted business in these countries through subsidiaries, including Biomet Argentina SA, Biomet International Corporation, Biomet China, and Scandimed AB.
  
  In Argentina, Biomet employees paid doctors kickbacks of between 15 and 20 percent of each sale.  Phony invoices were used to justify the payments, and the bribes were recorded as “consulting fees” or “commissions” in Biomet’s books and records.  Executives and internal auditors at Biomet’s Indiana headquarters were aware of the payments as early as 2000, but failed to stop them.
  
  In Brazil, Biomet employees used a Brazilian distributor to bribe doctors in Brazil by paying them between 10 and 20 percent of the value of their medical device purchases.  The distributor, Biomet International employees, and Biomet’s executives and internal auditors in the United States openly discussed the payments in communications. 
  
  In China, Biomet employees paid bribes through a Chinese distributor who provided doctors with money and travel in exchange for their purchases of Biomet products.  These allegations include payments of “consulting fees” of between 5 and 20 percent of sales, with one surgeon receiving 25 percent upon completion of a surgery.  Additionally, Biomet provided a dinner for a doctor, followed by a possible trip to Switzerland to visit his daughter and organized a trip for 20 surgeons to Spain for training, where a substantial portion of the trip was devoted to sightseeing and entertainment at Biomet’s expense.

• Enforcement
• The DOJ filed a criminal information against Biomet on March 26, 2012, charging Biomet with one count of conspiracy to violate the anti-bribery provisions of the FCPA, three counts of violations of the anti-bribery provisions of the FCPA, and one count of violating the books and records provisions of the FCPA.  On the same day, Biomet entered into a three-year deferred prosecution agreement under which Biomet agreed to pay a monetary penalty of $17.28 million.  Additionally, Biomet agreed to retain an independent corporate compliance monitor for a minimum period of 18 months and to self-monitor and report for the remainder of the DPA period.
   
  On March 26, 2012, the SEC filed a civil complaint against Biomet.  Biomet consented to the entry of a court order permanently enjoining it from any future FCPA violations and agreed to pay disgorgement and prejudgment interest totaling $5.57 million.  The SEC ordered Biomet to retain an independent corporate compliance monitor for a period of 18 months.  
   

• Amount of the Value
• $1,536,000.

• Amount of Business Related to Payment
• Not Stated

• Intermediary
• Subsidiaries; Third-Party Distributors.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 17,280,000

• Compliance Monitor
• Yes

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 22,855,731

• Related Enforcement Actions
• United States v. Zimmer Biomet Holdings, Inc. (D.D.C. 2017)
  United States v. Jerds Luxembourg Holding S.ÀR.L. (D.D.C. 2017)
  SEC v. Biomet, Inc. (D.D.C. 2012)
  In the Matter of Biomet, Inc. (2017)
  

Biomet, Inc. 

• Citation
• United States v. Biomet, Inc., No. 1:12–cr–00080 (D.D.C. 2012).

• Date Filed
• 03/26/2012

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery
  • Books-and-Records
  • Conspiracy

• Other Statutory Provision
• None

• Disposition
• Deferred Prosecution Agreement

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States