Johnson & Johnson, the world’s second-biggest maker of medical products, will pay $70 million after admitting that the company bribed doctors in Europe and paid kickbacks in Iraq to win contracts and sell drugs and artificial joints.
Bloomberg reports that subsidiaries of J&J paid bribes to doctors and hospital administrators in Greece, Poland and Romania, and also made illegal payments to Iraqi officials to win contracts under the U.N. oil-for-food program.
J&J used slush funds, sham contracts and off-shore companies in the Isle of Man to carry out the bribery, the SEC said. Doctors and administrators who ordered J&J products such as surgical implants or prescribed the company’s drugs were rewarded in various ways, including with cash and travel.
The company agreed to pay $48.6 million in disgorgement and interest to settle the SEC’s claims and a $21.4 million fine to settle criminal charges filed by the Justice Department. J&J admitted to the allegations and agreed to report on remediation and compliance measures every six months for three years.
J&J admitted it paid kickbacks to the former government of Iraq from 2000 to 2003 in exchange for contracts to provide supplies under the UN oil-for-food Program, according to the Justice Department agreement. The company, which made $6.1 million in profits through the Iraq bribes, resolved the SEC’s claims without admitting or denying the agency’s allegations.