Olympus Settles FCPA Charges with DOJ
The Department of Justice resolved another FCPA investigation centered on payments made to health officials. Olympus Corporation of the Americas, a wholly owned subsidiary of Olympus Corporation, Tokyo, Japan, and Olympus Latin America, Inc., resolved FCPA charges with the DOJ.
Olympus is the largest distributor of endoscopes and related medical equipment in the United States. It sells the devices world-wide. The activity here took place in Brazil Bolivia, Chile, Columbia, Argentina, Mexico and Costa Rica.
From 2006 through 2011 unlawful payments were made to medical officials. During the period the firm implemented a plan to increase medical equipment sales in Central and South America. The plan called for payments in cash, through money transfers, personal grants, personal travel and free or significantly discounted equipment.
The payments were delivered through what were called training centers. While those centers were supposedly set up to educate and train doctors in fact they were used with selected practitioners to provide benefits.
Nearly $3 million in payments were made. Those payments yielded over $7.5 million in profits. Company officials reportedly kept a spread-sheets of the illegal payments and tied them to sales and revenues. Employees were instructed on how to keep the payments secret.
The FCPA action was resolved with Olympus Latin America, Inc. entering into a deferred prosecution agreement. Under the terms of the Agreement the firm will pay a criminal fine of $22 million. The company will also retain a corporate compliance monitor for three years.
The fine is below the bottom of $28.5 million range calculated under the sentencing guidelines. While the company cooperated with the DOJ, it did not “timely” report. The firm did, however, terminate its involvement with a number of responsible parties. Those included employees and third party distributors in Latin America. It also enhanced its due diligence as to third parties.
The company also entered into a corporate integrity agreement with HHS and resolved parallel criminal and civil investigations under the Anti-Kickback Statute and False Claims Act. The firm paid a fine of $612 million.