US medical device maker charged of 'chocolate' bribery

These so-called 'chocolates' came in form of cash, laptops computers, televisions, and appliances, and were given by Texas-based medical device firm Orthofix International to the government officials in Mexico, found a probe by the US market regulator SEC (Securities and Exchange Commission).

The company has agreed to pay USD 5.2 million to settle the charges, and USD 2.22 million of monetary penalty as part of a deferred prosecution agreement.

The SEC's investigation team, which included an Indian- origin officer Alka N Patel, found that Orthofix's Mexican subsidiary Promeca SA de CV bribed officials at Mexico's government-owned health care and social services institution, the regulator said in a statement late last night.

Orthofix violated the Foreign Corrupt Practices Act (FCPA) when its "subsidiary paid routine bribes referred to as 'chocolates' to Mexican officials in order to obtain lucrative sales contracts with government hospitals, SEC said.

"The 'chocolates' came in the form of cash, laptop computers, televisions, and appliances that were provided directly to Mexican government officials or indirectly through front companies that the officials owned.

"The bribery scheme lasted for several years and yielded nearly USD 5 million in illegal profits for the Orthofix subsidiary," the regulator said.

"Once bribery has been likened to a box of chocolates, you know a corruptive culture has permeated your business.

"Orthofix's lax oversight allowed its subsidiary to illicitly spend more than USD 300,000 to sweeten the deals with Mexican officials," SEC Enforcement Division's Foreign Corrupt Practices Act Unit Chief Kara Novaco Brockmeyer said.

As per SEC, the bribes began in 2003 and continued until 2010. Initially, Promeca falsely recorded the bribes as cash advances and falsified its invoices to support the expenditures. Later, when the bribes got much larger, Promeca falsely recorded them as promotional and training costs.

Because of the bribery scheme, Promeca

image
Business Standard
177 22
Business Standard

US medical device maker charged of 'chocolate' bribery

Press Trust of India  |  Washington 



These so-called 'chocolates' came in form of cash, laptops computers, televisions, and appliances, and were given by Texas-based medical device firm Orthofix International to the government officials in Mexico, found a probe by the US market regulator SEC (Securities and Exchange Commission).

The company has agreed to pay USD 5.2 million to settle the charges, and USD 2.22 million of monetary penalty as part of a deferred prosecution agreement.

The SEC's investigation team, which included an Indian- origin officer Alka N Patel, found that Orthofix's Mexican subsidiary Promeca SA de CV bribed officials at Mexico's government-owned health care and social services institution, the regulator said in a statement late last night.

Orthofix violated the Foreign Corrupt Practices Act (FCPA) when its "subsidiary paid routine bribes referred to as 'chocolates' to Mexican officials in order to obtain lucrative sales contracts with government hospitals, SEC said.

"The 'chocolates' came in the form of cash, laptop computers, televisions, and appliances that were provided directly to Mexican government officials or indirectly through front companies that the officials owned.

"The bribery scheme lasted for several years and yielded nearly USD 5 million in illegal profits for the Orthofix subsidiary," the regulator said.

"Once bribery has been likened to a box of chocolates, you know a corruptive culture has permeated your business.

"Orthofix's lax oversight allowed its subsidiary to illicitly spend more than USD 300,000 to sweeten the deals with Mexican officials," SEC Enforcement Division's Foreign Corrupt Practices Act Unit Chief Kara Novaco Brockmeyer said.

As per SEC, the bribes began in 2003 and continued until 2010. Initially, Promeca falsely recorded the bribes as cash advances and falsified its invoices to support the expenditures. Later, when the bribes got much larger, Promeca falsely recorded them as promotional and training costs.

Because of the bribery scheme, Promeca

RECOMMENDED FOR YOU

US medical device maker charged of 'chocolate' bribery

Executives of a US-based orthopedic products company have been found to have paid lakhs of dollars of bribes, referring them as 'chocolates', in return for illegal profits worth about USD 5 million.

These so-called 'chocolates' came in form of cash, laptops computers, televisions, and appliances, and were given by Texas-based medical device firm Orthofix International to the government officials in Mexico, found a probe by the US market regulator SEC (Securities and Exchange Commission).

The company has agreed to pay USD 5.2 million to settle the charges, and USD 2.22 million of monetary penalty as part of a deferred prosecution agreement.

The SEC's investigation team, which included an Indian- origin officer Alka N Patel, found that Orthofix's Mexican subsidiary Promeca SA de CV bribed officials at Mexico's government-owned health care and social services institution, the regulator said in a statement late last night.

Orthofix violated the Foreign Corrupt Practices Act (FCPA) when its "subsidiary paid routine bribes referred to as 'chocolates' to Mexican officials in order to obtain lucrative sales contracts with government hospitals, SEC said.

"The 'chocolates' came in the form of cash, laptop computers, televisions, and appliances that were provided directly to Mexican government officials or indirectly through front companies that the officials owned.

"The bribery scheme lasted for several years and yielded nearly USD 5 million in illegal profits for the Orthofix subsidiary," the regulator said.

"Once bribery has been likened to a box of chocolates, you know a corruptive culture has permeated your business.

"Orthofix's lax oversight allowed its subsidiary to illicitly spend more than USD 300,000 to sweeten the deals with Mexican officials," SEC Enforcement Division's Foreign Corrupt Practices Act Unit Chief Kara Novaco Brockmeyer said.

As per SEC, the bribes began in 2003 and continued until 2010. Initially, Promeca falsely recorded the bribes as cash advances and falsified its invoices to support the expenditures. Later, when the bribes got much larger, Promeca falsely recorded them as promotional and training costs.

Because of the bribery scheme, Promeca image

Business Standard
177 22
Widgets Magazine

More News

Widgets Magazine
Widgets Magazine

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard