Wednesday, November 6, 2013

Styker Agrees to Settlement With U.S. Government

The medical device maker Stryker will pay the federal government $13.3 million to settle allegations that it bribed public health officials overseas to secure business, a violation of the Foreign Corrupt Practices Act.

The Securities and Exchange Commission (S.E.C.) said Stryker subsidiaries made $2.2 million in illegal payments to government employees in Argentina, Greece, Mexico, Poland and Romania from August 2003 to February 2008. Stryker made the payments to get or retain business, but it recorded them as legitimate consulting and service contracts, travel costs, charitable donations and commissions.

The S.E.C. claims that Stryker made $7.5 million in illicit profits as a result of the illegal payments. Stryker will pay the Treasury $7.5 million, plus $2.3 million in interest. It will also pay a $3.5 million civil penalty.

According to the S.E.C., Stryker had anticorruption corporate policies, but did not do enough to put them in action and legitimately regulate its operations. The company virtually ignored its internal compliance programs.

The Department of Justice and the S.E.C. began investigating the payments in 2007. The government has since closed its investigation into the matter.