Biomet Charged With Repeating FCPA Violations
Zimmer Biomet (formerly Biomet) paid over $30 million to resolve parallel SEC and DOJ investigations for repeated FCPA violations, including bribing Mexican customs officials and continuing to work with a prohibited Brazilian distributor despite a prior 2012 settlement, and agreed to a three-year independent compliance monitor.
Zimmer Biomet, formerly Biomet, agreed to pay more than $30 million to settle parallel SEC and DOJ investigations into repeated Foreign Corrupt Practices Act violations, including bribes to Mexican customs officials and continued use of a prohibited distributor in Brazil. The company paid $13.02 million to the SEC—$5.82 million in disgorgement, $702,705 in interest, and a $6.5 million penalty—and a $17.46 million criminal fine to the DOJ. As part of the resolution, Zimmer Biomet must retain an independent compliance monitor for three years and was credited for self-reporting and cooperation, though regulators emphasized its failure to remediate after its 2012 settlement.
Zimmer Biomet, formerly Biomet, agreed to pay over $30 million to resolve parallel investigations by the SEC and Department of Justice into repeated violations of the Foreign Corrupt Practices Act. The company had previously settled FCPA charges in March 2012 for over $22 million, but while implementing the mandated compliance reforms, it uncovered new misconduct in 2013 involving bribes to Mexican customs officials and continued dealings with a prohibited distributor in Brazil. The SEC found that Biomet improperly recorded transactions and used a third-party customs broker to smuggle unregistered and mislabeled dental products into Mexico. As part of the resolution, Zimmer Biomet paid $13.02 million to the SEC—$5.82 million in disgorgement, $702,705 in interest, and a $6.5 million penalty—and a $17.46 million criminal fine to the DOJ. The company also agreed to retain an independent compliance monitor for three years to review its FCPA policies. Regulators credited Zimmer Biomet for self-reporting the violations and cooperating with the investigation, but the SEC explicitly noted that the company failed to learn from its prior enforcement action. The investigation was conducted by SEC staff with assistance from the DOJ Criminal Division’s Fraud Section and the FBI.
Exhibits & Attached Documents (1)
Extracted insights
- $30.00M $30 million $10M–$100M
- $22.00M $22 million $10M–$100M
- $17.46M $17.46 million $10M–$100M
- $13.00M $13 million $10M–$100M
- $6.50M $6.5 million $1M–$10M
- $5.82M $5.82 million $1M–$10M
- $703K $702,705 $100K–$1M
- agency deferred prosecution agreement with department of justice
- person independent compliance consultant
- person independent compliance monitor
- agency monitor and sec in 2013
- person zimmer biomet
- Biomet Agreed To Pay More Than $30 Million
- Biomet Entered Into Deferred Prosecution Agreement With Department Of Justice
- Biomet Agreed To Retain Independent Compliance Consultant
- Biomet Notified Monitor And SEC In 2013
- Biomet Continued To Interact Known Prohibited Distributor In Brazil
- Biomet Used Third-Party Customs Broker To Pay Bribes To Mexican Customs Officials
- Zimmer Biomet Agreed To Pay More Than $5.82 Million In Disgorgement Plus $702,705 In Interest And $6.5 Million Penalty
- Zimmer Biomet Agreed To Retain Independent Compliance Monitor
- Zimmer Biomet Agreed To Pay Fine Of More Than $17.46 Million
The Securities and Exchange Commission today announced that a Warsaw, Ind.-based medical device manufacturer has agreed to pay more than $30 million to resolve parallel SEC and Department of Justice investigations into the company’s repeat violations of the Foreign Corrupt Practices Act (FCPA). Biomet first faced FCPA charges from the SEC and entered into a deferred prosecution agreement with the Department of Justice in March 2012, agreeing to pay more than $22 million to settle both cases. As part of the SEC settlement, Biomet agreed to retain an independent compliance consultant to review its FCPA compliance program. After the settlement as Biomet was implementing recommendations from the independent monitor, the company learned about potential anti-bribery violations in Brazil and Mexico and notified the monitor and the SEC in 2013. The SEC’s order finds that Biomet continued to interact and improperly record transactions with a known prohibited distributor in Brazil, and used a third-party customs broker to pay bribes to Mexican customs officials to facilitate the importation and smuggling of unregistered and mislabeled dental products. “Biomet didn’t entirely learn its lesson the first time around as it continued to use a prohibited agent in Brazil and engaged in a new bribery scheme in Mexico,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit. Biomet, which has since been acquired by Zimmer Holdings and renamed Zimmer Biomet, agreed to pay more than $5.82 million in disgorgement plus $702,705 in interest and a $6.5 million penalty for a total of more than $13 million. Zimmer Biomet also agreed to retain an independent compliance monitor for a three-year period to review its FCPA policies. As part of the deferred prosecution agreement with the Department of Justice, Zimmer Biomet agreed to pay a fine of more than $17.46 million. The SEC’s investigation was conducted by Michelle L. Ramos, Robert Dodge, and Shahriar Masud. The case was supervised by Tracy L. Price. The SEC appreciates the assistance of the Department of Justice Criminal Division’s Fraud Section and the Federal Bureau of Investigation.
The Securities and Exchange Commission today announced that a Warsaw, Ind.-based medical device manufacturer has agreed to pay more than $30 million to resolve parallel SEC and Department of Justice investigations into the company’s repeat violations of the Foreign Corrupt Practices Act (FCPA). Biomet first faced FCPA charges from the SEC and entered into a deferred prosecution agreement with the Department of Justice in March 2012, agreeing to pay more than $22 million to settle both cases. As part of the SEC settlement, Biomet agreed to retain an independent compliance consultant to review its FCPA compliance program. After the settlement as Biomet was implementing recommendations from the independent monitor, the company learned about potential anti-bribery violations in Brazil and Mexico and notified the monitor and the SEC in 2013. The SEC’s order finds that Biomet continued to interact and improperly record transactions with a known prohibited distributor in Brazil, and used a third-party customs broker to pay bribes to Mexican customs officials to facilitate the importation and smuggling of unregistered and mislabeled dental products. “Biomet didn’t entirely learn its lesson the first time around as it continued to use a prohibited agent in Brazil and engaged in a new bribery scheme in Mexico,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit. Biomet, which has since been acquired by Zimmer Holdings and renamed Zimmer Biomet, agreed to pay more than $5.82 million in disgorgement plus $702,705 in interest and a $6.5 million penalty for a total of more than $13 million. Zimmer Biomet also agreed to retain an independent compliance monitor for a three-year period to review its FCPA policies. As part of the deferred prosecution agreement with the Department of Justice, Zimmer Biomet agreed to pay a fine of more than $17.46 million. The SEC’s investigation was conducted by Michelle L. Ramos, Robert Dodge, and Shahriar Masud. The case was supervised by Tracy L. Price. The SEC appreciates the assistance of the Department of Justice Criminal Division’s Fraud Section and the Federal Bureau of Investigation.