Joel Hendon

Justice Department Receives $16.8 Million Settlement From Medical Devices Company


Posted: Monday, February 13, 2012

by Joel Hendon
http://hebronics.org/index.html

The U.S. Justice Department news release dated February 6, 2012 announces Smith & Nephew Inc. has entered into a deferred prosecution agreement with the Department of Justice to resolve improper payments by the company and certain affiliates in violation of the Foreign Corrupt Practices Act (FCPA), the Department of Justice announced today. The matter is part of an investigation into bribery by medical device companies of physicians employed by government institutions.

Smith & Nephew, Inc. with facilities in Delaware and Tennessee is a fully owed subsidiary of Smith & Nephew, PLC of London.

Smith & Nephew PLC is a global medical devices company headquartered in London, United Kingdom. It is the world's largest producer of arthroscopy products, second-largest producer of advanced wound management products, third-largest producer of trauma and clinical therapy products and fourth-largest producer of orthopedic reconstruction products. It has operations in 32 countries and its products are sold in over 90 countries. (Wikipedia)

Smith & Nephew acknowledged full responsibility for actions taken by it’s affiliates, employees, subsidiaries and agents who participated in making various improper payments to publicly-employed health care providers in Greece from 1998 until 2008 to obtain their business

Smith & Nephew, through certain executives, employees and affiliates, agreed to sell products at full list price to a Greek distributor based in Athens, and then pay the amount of the distributor discount to an off-shore shell company controlled by the distributor. These off-the-books funds were then used by the distributor to pay cash incentives and other things of value to publicly-employed Greek health care providers to induce the purchase of Smith & Nephew products. (DOJ News Release: 02-07-2012)

The release shows that, from 1998 to 2008, various affiliates and employees authorized the payment of $9.4 million to it’s shell companies which was then passed on to Greek physicians to induce them to purchase their medical devices.

In the agreement, Smith & Nephew will pay a $16.9 million penalty and will institute rigorous internal controls, cooperate fully with the DOJ and retain a compliance monitor for 18 months. The firm has also agreed to pay $5.4 million in disgorgement of profits in a related matter with the U.S. Securities and Exchange Commission.
Author Biography: Joel Hendon was born near Gadsden Alabama. He attended public schools in Cherokee County, Alabama and after serving a tour of duty in the U.S. Army during the Korean War, attended Jacksonville State University, majoring in Business Administration. He became a Christian in 1948, and although he followed secular work as a career and retired from Allied Signal Aerospace, he is an avid student of the Holy Bible and related works as well as biblical history. He has an extensive website of conservative religious and political articles.http://hebronics.org/index.html

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