Johnson & Johnson to Pay $70 Million to Settle FCPA Allegations

On April 8, 2011, U.S. Department of Justice (DOJ) reported that Johnson & Johnson (J&J) has agreed to pay a $21.4 million criminal penalty as part of a deferred prosecution agreement with the DOJ to resolve improper payments by J&J subsidiaries to government officials in Greece, Poland and Romania in violation of the Foreign Corrupt Practices Act (FCPA). 

According to the deferred prosecution agreement, J&J has acknowledged responsibility for the actions of its subsidiaries, employees and agents who made various improper payments to public health care providers in Greece, Poland and Romania in order to induce the purchase of medical devices and pharmaceuticals manufactured by J&J subsidiaries. J&J also acknowledged that kickbacks were paid on behalf of J&J subsidiary companies to the former government of Iraq under the United Nations Oil for Food Program in order to secure contracts to provide humanitarian supplies. A criminal information filed in connection with the deferred prosecution agreement charges J&J subsidiary DePuy Inc. with conspiracy and violations of the FCPA in connection with the payments to public physicians in Greece. 

The agreement recognizes J&J's timely voluntary disclosure, and thorough self-investigation of the underlying conduct; the extraordinary cooperation provided by the company to the department, the SEC and multiple foreign enforcement authorities, including significant assistance in the industry-wide investigation; and the extensive remedial efforts and compliance improvements undertaken by the company. Due to J&J's pre-existing compliance and ethics programs, extensive remediation, and improvement of its compliance systems and internal controls, J&J was not required to retain a corporate monitor, but it must report to the Department of Commerce on implementation of its remediation and enhanced compliance efforts every six months for the duration of the agreement.  

In a related matter, J&J reached a settlement with the Securities and Exchange Commission (SEC) under which it agreed to pay more than $48.6 million in disgorgement of profits, including pre-judgment interest.