Biomet, Inc., headquartered in Indiana, was a medical device company that sold medical device and dental products. In June 2015, Biomet was acquired by Zimmer Holdings, Inc., and the combined companies were renamed Zimmer Biomet Holdings, Inc. Zimmer Biomet's shares were registered with the SEC and traded on the New York Stock Exchange and the SIX Swiss Exchange.
This enforcement action is part of a second group of enforcement actions initiated against Biomet. In March 2012, the company entered into a DPA with the DOJ and a consent agreement with the SEC based on misconduct in Argentina, Brazil, and China. According to the filings in these new enforcement actions, from about 2008 to 2013, Biomet made unlawful payments to Mexican customs officials to facilitate the importation of dental products into Mexico. Despite telling the government that it would stop using a Brazilian distributor implicated in the 2012 enforcement actions, Biomet nevertheless continued using the distributor, and due to improper recording of those transactions, Biomet could not determine if the distributor had continued to make improper payments to Brazilian officials.
On January 12, 2017, the SEC initiated a settled administrative proceeding against Biomet alleging violations of the anti-bribery, books & records, and internal controls provisions of the FCPA. Under the the terms of the proceeding, the SEC ordered Biomet to cease and desist violations of the FCPA, to pay a civil penalty of $6.5 million plus disgorgement and prejudgment interest of $6,522,805, and to hire an independent monitor to report on the company's anti-corruption compliance for a term of three years.
In a related proceeding on January 12, 2017, the DOJ filed a superseding Information in the case against Zimmer Biomet alleging violations of the internal controls provisions of the FCPA. The DOJ filed the superseding Information due to Biomet's, and subsequently Zimmer Biomet's, failure to adhere to the requirements of the DPA from 2012. According to the superseding Information, from about 2008 to 2013, Biomet made unlawful payments to Mexican customs officials to facilitate the importation of dental products into Mexico. Additionally, despite telling the government that it would stop using a Brazilian distributor implicated in the 2012 enforcement actions, Biomet nevertheless continued using the distributor, and due to improper recording of those transactions, Biomet could not determine if the distributor had continued to make improper payments to Brazilian officials. On the same date that the superseding information was filed, Zimmer Biomet entered into a Deferred Prosecution Agreement with the DOJ with a term of three years. Under the terms of the DPA, Zimmer Biomet accepted responsibility for the misconduct detailed in the superseding Information, agreed to pay a criminal monetary penalty of $17,460,300, plus disgorgement and prejudgment interest of $6,522,805, and to hire an independent compliance monitor to report to the DOJ for three years on the company's anti-corruption compliance.
In a related action on January 12, 2017, the DOJ filed a single count information in the District of Columbia against JERDS alleging violations of the books and records provisions of the FCPA. On the same date, JERDS entered into a plea agreement with the DOJ, under which the company agreed to plead guilty to the books and records violation. Though the U.S. Sentencing Guidelines stipulated a fine between $2.2 and $4.5 million, the DOJ agreed not impose any monetary penalty against JERDS in light of the $17.5 million penalty assessed in the related DPA with Zimmer Biomet.
