Biomet, Inc. ("Biomet") was incorporated in Indiana with its principal place of business in Warsaw, Indiana and manufactured and sold orthopedic medical devices worldwide. Until September 25, 2007, it issued and maintained a class of publicly traded securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934.
Biomet Argentina SA ("Biomet Argentina"), a wholly-owned subsidiary of Biomet, was an Argentine corporation through which Biomet conducted business in Argentina. Biomet International Corporation ("Biomet International"), a wholly-owned subsidiary of Biomet, was a Delaware corporation through which Biomet sold products into Brazil. Biomet China, a wholly-owned subsidiary of Biomet, was a Chinese corporation through which Biomet sold products into China. Scandimed AB ("Scandimed"), a wholly owned-subsidiary of Biomet, was a Swedish corporation through which Biomet sold products into China and elsewhere.
From 2000 to 2008, defendant Biomet, Biomet Argentina, Biomet International, Scandimed, and Biomet China, and their related subsidiaries and employees, authorized the payment of at least $1.5 million to publicly employed health care providers to induce the purchase of Biomet products. These payments included approximately $436,000 in cash incentives paid to Argentine health care providers, approximately $1.1 million in case incentives to Brazilian health care providers, and an undisclosed amount of payments made to Chinese health care providers. In China, Biomet also paid for non-business related travel for several surgeons.
On March 26, 2012, the SEC filed a three count Complaint in the District of Columbia against Biomet alleging violations of the anti-bribery, books & records, and internal controls provisions of the FCPA. On the same date, Biomet entered into a Consent Agreement with the SEC. Under the terms of the agreement, Biomet niether admitted nor denied the conduct alleged in the Complaint but consented to entry of final judgment in the matter. On March 27, 2012, the court entered final judgment against Biomet. The court enjoined the company from future violations of the FCPA, required it to disgorge $4,432,998, representing profits gained as a result of the conduct alleged in the Complaint, plus prejudgment interest of $1,142,733, for a total of $5,575,731, and incorporated the terms of the Consent Agreement which required the implementation of enhanced compliance programs as well as the hiring of an independent monitor.
In a related action, Biomet entered into a Deferred Prosecution Agreement with the DOJ. Under the terms of that agreement, Biomet acknowledged and accepted responsibility for the conduct alleged in the Information and agreed to pay a fine of $17.28 million, to continue to implement enhanced anti-corruptions policies and procedures, and to hire an independent monitor for a term of 18 months.
