April 8, 11

NEWS / Johnson & Johnson Agrees to Pay $21.4 Million Criminal Penalty to Resolve Foreign Corrupt Practices

Company to Pay Total Penalties of $70 Million in Resolutions with Justice Department and U.S. Securities and Exchange Commission (SEC)

WASHINGTON – Johnson & Johnson (J&J) has agreed to pay a $21.4 million criminal penalty as part of a deferred prosecution agreement with the Department of Justice to resolve improper payments by J&J subsidiaries to government officials in Greece, Poland and Romania in violation of the Foreign Corrupt Practices Act (FCPA), the Justice Department’s Criminal Division announced today. The agreement also resolves kickbacks paid to the former government of Iraq under the United Nations Oil for Food Program.



J&J is headquartered in New Brunswick, N.J., and is listed on the New York Stock Exchange. The company manufactures and sells medical devices, pharmaceuticals and consumer health care products.



“Today, Johnson & Johnson has admitted that its subsidiaries, employees and agents paid bribes to publicly-employed health care providers in Greece, Poland and Romania, and that kickbacks were paid on behalf of Johnson & Johnson subsidiary companies to the former government of Iraq under the United Nations Oil for Food program,” said Principal Deputy Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.” “Johnson & Johnson, however, has also cooperated extensively with the government and, as a result, has played an important role in identifying improper practices in the life sciences industry. As today’s agreement reflects, we are committed to holding corporations accountable for bribing foreign officials while, at the same time, giving meaningful credit to companies that self-report and cooperate with our investigations.”



According to the agreement, J&J has acknowledged responsibility for the actions of its subsidiaries, employees and agents who made various improper payments to publicly-employed health care providers in Greece, Poland and Romania in order to induce the purchase of medical devices and pharmaceuticals manufactured by J&J subsidiaries. J&J also acknowledged that kickbacks were paid on behalf of J&J subsidiary companies to the former government of Iraq under the United Nations Oil for Food Program in order to secure contracts to provide humanitarian supplies. A criminal information, filed in U.S. District Court in the District of Columbia in connection with the deferred prosecution agreement, charges J&J subsidiary DePuy Inc. with conspiracy and violations of the FCPA in connection with the payments to public physicians in Greece.



The agreement recognizes J&J’s timely voluntary disclosure, and thorough and wide-reaching self-investigation of the underlying conduct; the extraordinary cooperation provided by the company to the department, the SEC and multiple foreign enforcement authorities, including significant assistance in the industry-wide investigation; and the extensive remedial efforts and compliance improvements undertaken by the company. In addition, J&J received a reduction in its criminal fine as a result of its cooperation in the ongoing investigation of other companies and individuals, as outlined in the U.S. Sentencing Guidelines. J&J’s fine was also reduced in light of its anticipated resolution in the United Kingdom. Due to J&J’s pre-existing compliance and ethics programs, extensive remediation, and improvement of its compliance systems and internal controls, as well as the enhanced compliance undertakings included in the agreement, J&J was not required to retain a corporate monitor, but it must report to the department on implementation of its remediation and enhanced compliance efforts every six months for the duration of the agreement.



In a related matter, J&J reached a settlement today with the SEC under which it agreed to pay more than $48.6 million in disgorgement of profits, including pre-judgment interest.



This case is being prosecuted by Trial Attorney Kathleen M Hamann of the Criminal Division’s Fraud Section with assistance from the FBI’s Washington Field Office’s dedicated FCPA squad. The Criminal Division’s Office of International Affairs provided assistance in this matter.



The Justice Department acknowledges and expresses its appreciation for the significant assistance provided by the authorities of the 8th Ordinary Interrogation Department of the Athens Court of First Instance and the Athens Economic Crime Squad in Greece; the 5th Investigation Department of the Regional Prosecutor’s Office in Radom, Poland; the Fraud Squad of the West Yorkshire Police Department in the United Kingdom; and the SEC’s Division of Enforcement, as well as the coordination and cooperation with the authorities of the United Kingdom’s Serious Fraud Office.

http://www.justice.gov/opa/pr/2011/April/11-crm-446.html

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