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Medical Device Maker Facing new Bribery Allegations

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Medical Device Maker Facing new Bribery Allegations

Medical Device Maker Facing new Bribery Allegations

Medical device maker Biomet is being investigated by the U.S. Justice Department (D.O.J.) due to fresh bribery allegations.

Prosecutors will extend Biomet’s probation for an additional year, the firm announced earlier this week, in light of recent allegations made by an anonymous whistleblower. According to an email written by the whistleblower, distributors hired by Biomet to sell the company’s orthopedic devices paid kickbacks to government doctors. An internal investigation was launched when Biomet disclosed the email to the government, and several employees at the center of the scandal were fired, according to The New York Times (The Times).

It is not the first time Biomet has been admonished for unlawful behavior. In 2012, the company paid the federal government $17 million and struck a deferred prosecution agreement that allowed the device maker to avoid criminal charges. As part of the agreement, Biomet had to behave itself for three years. The newest allegations may halt Biomet’s $13.35 billion merger with its main rival, Zimmer Holdings. The extension of the deferred-prosecution agreement also allows prosecutors more time to press criminal charges against Biomet, The Times reported.

The D.O.J. has informed Biomet that it retains its rights under the D.P.A. to bring further action against Biomet relating to the conduct in Brazil and Mexico, the company disclosed in a regulatory filing released late Tuesday that was viewed by The Times, adding, “The D.O.J. could, among other things, revoke the D.P.A. or prosecute Biomet and/or the involved employees and executives.”

It is becoming more commonplace for the D.O.J. to extend some prominent deferred-prosecution agreements as the department works to overhaul the way it deals with corporate repeat offenders. Last year, the D.O.J. extended an agreement with the British bank Standard Chartered by three months over accusations that the bank was doing business with Iran. Prosecutors also extended agreements with Barclays and UBS over their manipulation of interest rates after evidence suggested the banks were conspiring to fix the price of foreign currencies, according to The Times.

Lawyers familiar with the Biomet case say the Justice Department discussed a possible new deferred-prosecution agreement with the firm, but that may change now that prosecutors are extending the original DPA. Prosecutors may decide to impose criminal charges on the company’s Brazilian and Mexican subsidiaries and any employees involved in the alleged bribery, The Times reported. disclaimer: This article: Medical Device Maker Facing new Bribery Allegations was posted on Friday, March 20th, 2015 at 1:39 pm at and is filed under Fraud Lawsuits.

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