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 | Enforcement Action Dataset

Stanford Foreign Corrupt Practices Act Clearinghouse a Collaboration with Sullivan & Cromwell LLP

Enforcement Action Dataset

 
United States of America v. AGA Medical Corporation · AGA Medical's Involvement in China in 1997

Case Information

United States of America v. AGA Medical Corporation

Related FCPA Matter:   AGA Medical's Involvement in China in 1997 Information

Case Information

Initiation Date:    06/03/2008  Information

Prosecuting Agency:    U.S. Department of Justice

Type of Action:    DOJ Criminal Proceeding

Docket or Case Number:    08-cr-00172

Court:    D. Minnesota

Name of Prosecuting Attorneys:   

  • William B. Jacobson, Assistant Chief, Fraud Section, Criminal Division
  • David A. Bybee, Trial Attorney, Fraud Section, Criminal Division
  • Steven A. Tyrell, Chief, Fraud Section, Criminal Division

US Assisting Agencies:   

  • Federal Bureau of Investigation

Foreign Enforcement Action/Investigation:    Unknown

Foreign Assistance:    Unknown

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

AGA Medical Corporation ("AGA"), was incorporated in 1995 in Minnesota, and had its principal place of business in Golden Valley, Minnesota. AGA manufactured and sold medical devices for the minimally invasive treatment of congenital heart defects.

From 1997 to 2005, in order to obtain and retain business, AGA, a high-ranking officer of AGA and other AGA employees made corrupt payments to doctors in China who were employed by government-owned hospitals. To make the corrupt payments, AGA used a Chinese Distributor who informed the high-ranking officer of AGA that hospitals in China were asking for a 10% "discount" and physicians were asking for a 10% "commission" on products sold. The Chinese Distributor further informed Officer A that if AGA did not accept those terms, the hospitals and physicians would not purchase AGA's products.

In addition, from 2000 through 2002, AGA sought patents on several of its products from the People’s Republic of China State Intellectual Property Office. In order to have the patents approved, AGA and the high-ranking officer of AGA made corrupt payments through the Chinese distributor to Chinese government officials employed by the State Intellectual Property Office.

AGA paid a total of $460,000 to physicians in China and Chinese patent officials. From 1997 to 2005, AGA sales in China totaled approximately $13.5 million.

On June 3, 2008, the DOJ filed an information against AGA, charging the company with conspiracy to violate the anti-bribery provisions and violating the anti-bribery provisions of the FCPA. At the same time, AGA entered into a three-year deferred prosecution agreement with the DOJ. Under the DPA, AGA agreed to pay a $2,000,000 criminal penalty, and retain an independant compliance monitor for three years.

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