Smith & Nephew Settles Greek Bribery Charges

Smith & Nephew has agreed to pay the U.S. government more than $22 million to settle charges that the company bribed Greek public doctors over more than a decade.

The government had charged Smith & Nephew's U.S. subsidiary under the Foreign Corrupt Practices Act. The government alleged that the company used a distributor to create a "slush fund" to forward payments to doctors working at government hospitals in Greece in order to win business.

This won't come as a shock to readers of Michael Lewis's book, Boomerang. In the book Lewis claims that Greece has a well known culture of cheating on taxes, bribing public officials and cooking the public books.

The company has committed to pay $22,226,799 in fines and profit disgorgement, maintain an enhanced compliance program, and appoint an independent monitor for at least 18 months to review and report on its compliance program.

Smith & Nephew and other medical device companies were asked by the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) in late 2007 to look into possible improper payments to government-employed doctors and voluntarily report any issues. Smith & Nephew found and reported evidence of improper payments by a distributor in Greece that had been appointed by Smith & Nephew subsidiaries and was terminated in 2008. A company statement noted that the individuals implicated are no longer associated with the company.

"We have what I believe to be a world-class compliance program, having enhanced it significantly since this investigation began in 2007," commented Olivier Bohuon, the company's new CEO in the February 6 press release. "These legacy issues do not reflect Smith & Nephew today. But they underscore that we must remain vigilant every place we do business and let nothing compromise our commitment to integrity."