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EnergyUK firm pays £14m in 'bribery' case
Filed under: Scams & Fraud
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British orthopaedics maker Smith & Nephew has agreed to pay 22.2 million US dollars (£14 million) to settle American criminal and civil allegations that it bribed doctors employed by the Greek government for more than a decade to win business.
Smith & Nephew's agreements with the US justice department and the Securities and Exchange Commission (SEC) are the American government's latest action stemming from its investigation into bribery by medical device companies of doctors employed by governments overseas.
Under the new agreements, parent company Smith & Nephew plc is paying 5.4 million dollars in restitution and interest to settle the SEC's civil charges.
Its US subsidiary Smith & Nephew Inc, based in Memphis, Tennessee, is paying a 16.8 million dollar criminal fine in an agreement with the US justice department.
The US government accused the company of violations of the Foreign Corrupt Practices Act in Greece between 1997 and 2008. The law prohibits bribery of foreign government officials or company executives to secure or retain business.
In Greece, which has a national healthcare system in which most hospitals are public, doctors working in the hospitals are government employees. That makes them foreign officials under the US anti-bribery law.
Smith & Nephew's US and German subsidiaries carried out the scheme by selling orthopaedic products at full price to a Greek distributor, then channeling the amount of the distributor's discount to an offshore shell company controlled by the distributor, the US government said.
The distributor used the offshore funds to pay bribes to Greek doctors to get them to buy the company's products, according to the government.
Smith & Nephew Inc acknowledged responsibility for the actions that its subsidiaries and employees took to make the payments to Greek doctors, the justice department said.
The issues "do not reflect Smith & Nephew today", said company chief executive Olivier Bohuon. "But they underscore that we must remain vigilant every place we do business and let nothing compromise our commitment to integrity."
