Case Detail

United States v. DePuy, Inc. (D.D.C. 2011)


Case Details

  • Case Name
  • United States v. DePuy, Inc. (D.D.C. 2011)
  • Date Filed
  • 04/08/2011
  • Enforcement Agency
  • DOJ
  • Countries
  • Greece, Iraq, Poland, Romania
  • Foreign Official
  • Publicly-employed doctors in Greece; publicly-employed doctors and hospital administrators in Poland; publicly-employed doctors and pharmacists in Romania; top Ministry of Health officials in Iraq.
  • Date of Conduct
  • 1998 to 2006
  • Nature of Business
  • Sale of medical devices and pharmaceuticals manufactured by DePuy, Inc. (“DePuy”) and DePuy International, both wholly-owned subsidiaries of Johnson & Johnson, a U.S. based manufacturer and seller of health care products.  Other subsidiaries, employees, and agents of Johnson & Johnson paid bribes to publicly-employed health care providers in Poland and Romania and paid kickbacks to the former government of Iraq in connection with the U.N. Oil for Food Program.
  • Influence to be Obtained
  • From at least 1998 to 2006, DePuy and DePuy International paid bribes to public doctors in Greece who selected Johnson & Johnson surgical implants for use in various medical procedures.  The scheme was perpetrated via a complicated web of transactions through distributors and agents (including a Greek distributor which DePuy International later acquired) who paid bribes recorded as commissions.  The scheme was furthered by a high-level executive.  In total, DePuy and its subsidiaries and employees authorized approximately $16.4 million in payments, a significant portion of which they knew would be used to pay cash incentives to publicly-employed Greek healthcare providers to induce them to purchase DePuy products.  
     
    In addition, from 2000 to 2006, Johnson & Johnson’s Polish subsidiary made improper payments and provided things of value, including travel sponsorships, to publicly-employed doctors and hospital administrators in Poland to induce them to use Johnson & Johnson medical devices and award medical device tenders.  
     
    From 2005 to 2008, a Romanian Johnson & Johnson subsidiary also authorized approximately $140,000 in cash and travel payments to publicly-employed doctors and pharmacists in Romania to induce them to prescribe Johnson & Johnson products.  
     
    Between February 2001 and June 2004, two other Johnson & Johnson subsidiaries, Cilag AG International and Janssen Pharmaceutica N.V., paid 10% kickbacks, totaling approximately $857,387, to the former government of Iraq under the U.N. Oil for Food Program to secure contracts to provide humanitarian supplies worth $9.9 million.  
     
  • Enforcement
  • On January 14, 2011, Johnson & Johnson, together with its subsidiaries (including DePuy) and its operating companies, entered into a three-year deferred prosecution agreement, under which Johnson & Johnson acknowledged responsibility for the underlying conduct and agreed to pay a $21,400,000 criminal penalty.  Pursuant to that agreement, the DOJ filed a criminal information against DePuy on April 8, 2011, charging it with conspiracy, aiding and abetting, and substantive violations of the FCPA.  The deferred prosecution agreement expressly reduces Johnson & Johnson’s monetary penalty on the basis of the company’s self-disclosure, self-investigation, and ongoing compliance measures.  Although the settlement does not require that Johnson & Johnson employ a corporate monitor, it must report to the DOJ on compliance efforts bi-yearly for the duration of the agreement. 
     
    In a related settlement with the SEC, Johnson & Johnson agreed to pay $38,227,826 in disgorgement and $10,438,490 in prejudgment interest.  
     
  • Amount of the Value
  • Not Stated
  • Amount of Business Related to Payment
  • Not Stated
  • Intermediary
  • Greek Distributor
  • Total Sanction
  • $ 21,400,000
  • Compliance Monitor
  • No
  • Reporting Requirements
  • No
  • Case is Pending?
  • No
  • Total Combined Monetary Sanction
  • $ 70,066,316

Defendants

DePuy, Inc. 

  • Citation
  • United States v. DePuy, Inc., No. 1:11 cr-00099 (D.D.C. 2011).
  • Date Filed
  • 04/08/2011
  • Filed Under Seal
  • No
  • FCPA Statutory Provision
    • Anti-Bribery
    • Conspiracy: Anti-Bribery
  • Other Statutory Provision
  • None
  • Disposition
  • Deferred Prosecution Agreement
  • Defendant Jurisdictional Basis
  • Domestic Concern
  • Defendant's Citizenship
  • United States
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