On March 1, a Miami-based medical device company entered into a deferred prosecution agreement (DPA) to resolve charges of conspiracy to violate the FCPA and violating the FCPA in connection with improper payments and benefits to health care practitioners at government-owned facilities in Central and South America. The company, which is a majority-owned subsidiary of the United States’ largest distributor of endoscopes and related medical equipment, agreed to pay a $22.8 million penalty and admitted its criminal conduct.
According to the company’s admissions, from 2006 through August 2011, it “designed and implemented a plan to increase medical equipment sales in Central and South America by providing personal benefits, including cash, money transfers, [ ] travel, free or heavily discounted equipment, and other things of value to certain health care practitioners” employed at government-owned health care facilities. The improper payments totaled nearly $3 million, which resulted in the recognition of more than $7.5 million in profits.
Under the terms of the DPA, the DOJ will defer criminal prosecution for a period of three years and the company will appoint a compliance monitor and implement numerous compliance measures. In reaching the resolution, the DOJ gave the company a 20 percent reduction on its penalty as a result of its cooperation, which included “conducting an extensive internal investigation, translating documents, and collecting, analyzing, and organizing voluminous evidence and information.” However, in assessing the penalty, the DOJ noted that the company did not voluntarily disclose the misconduct in a timely manner.