An international division of DePuy Orthodpaedics Inc. has agreed to pay $7.9 million (£4.8 million) plus prosecution costs to settle a U.K. probe of illegal activities the company allegedly conducted in Greece. The investigation, led by the Serious Fraud Office (SFO), found that DePuy International Ltd., based in Leeds, U.K., engaged in “unlawful conduct relating to the sale of orthopaedic products in Greece between 1998 and 2006.”
DePuy International Ltd. is a division of DePuy Orthopaedics, Inc. of Warsaw, Indiana, which is owned by parent company Johnson & Johnson.
The SFO investigation probed allegations that DePuy executives bribed officials in Greece, providing kickbacks in exchange for contracts to supply orthopedic products. SFO authorities said that Greek officials received as much as 20 percent of the value of the contracts.
Greek authorities subsequently have frozen the assets of DePuy Hellas, worth 5.8 million Euros.
Johnson & Johnson followed an internal complaint in 2006 and launched its own investigation of non-compliance with company rules in connection with the sale of DePuy products in Greece. The company reported its findings to the U.S. Department of Justice as well as the U.S. Securities and Exchange Commission. The Department of Justice in turn reported Johnson & Johnson’s illegal activities to the SFO in 2007.
Johnson & Johnson also agreed to pay $70 million in fines to settle claims in the U.S. that it bribed doctors in Europe and paid kickbacks in Iraq to sell products and win contracts.
SFO Director Richard Alderman said that the settlement with Johnson & Johnson “served both the interests of justice and the company’s desire to put illegal activity behind it.”
Johnson & Johnson’s CEO William C. Weldon said that his company is “deeply disappointed by the unacceptable conduct that led to these violations.” The kickbacks in Greece were arranged by Robert Dougall, a former marketing director at DePuy, who admitted his role in paying Greek doctors £4.5 million in exchange for the contracts. Mr. Dougall was sentenced to a year in prison after agreeing to cooperate with U.K. and U.S. authorities investigating the illegal payoffs.