Olympus pays $646m in Anti-Kickback case
Olympus has agreed to pay $646m (£459.6m) to resolve a lawsuit and criminal charges for violating the US Anti-Kickback Statute (AKS), reported Bloomberg BNA
The settlement resolves claims regarding systemic violations of the AKS brought by Kenney & McCafferty client, John Slowick, and is the largest payment in US history under the Financial Conduct Authority (FCA) by a medical device company, according to the law firm.
The criminal charge placed against the company displayed that it paid millions in kickbacks to doctors and hospitals in order to secure product sales, according to the US Department of Justice (DOJ).
Olympus admitted to a large list of kickback arrangements including:
- Paying illegal remuneration to physicians and hospitals in the form of free medical equipment
- Paying physicians more than $100,000 (£71,000) per year to increase the purchases of Olympus products
- Giving physicians and sometimes their spouses, luxury, all-expenses paid vacations to exotic international destinations
- Paying millions of dollars in kickbacks and bribes to customers all across the US in exchange for new business
The settlement terms were included in a deferred prosecution agreement (DPA) and will be split between a $312.4m (£222m) criminal penalty, a $310.8m (£220.8m) settlement on the civil claims and an additional $22.8m (£16.2m) criminal penalty for violation of the Foreign Corrupt Practices Act by Olympus Latin America Inc. (OLA), an Olympus subsidiary in Miami, reported Bloomberg BNA.
The civil charges were the product of a civil lawsuit brought by a former Olympus compliance officer, John Slowik, who will receive $51.1m (£36.3m) of the civil settlement amount.
Olympus and its subsidiary “dropped the compliance ball and failed to have in place policies and practices that would have prevented the substantial kickbacks and bribes they paid,” U.S. Attorney Paul J. Fishman of the District of New Jersey said in a statement.
Fishman added that the punishment was appropriate, and, “at the same time, the deferred prosecution agreement takes into account the companies’ cooperation and commitment to fully functional corporate compliance.”
Olympus also entered into a five-year corporate integrity agreement as part of the settlement terms. The DPA also required Olympus to implement extensive compliance protections and procedures, including the retention of an independent monitor (former federal prosecutor Larry Mackey) to check Olympus's compliance through the duration of the DPA, reported Bloomberg BNA.
In a statement posted on its website, Olympus said it “acknowledges the Company’s responsibility for the past conduct, which does not represent the values of Olympus or its employees.
“Olympus is committed to complying with all laws and regulations and to adhering to our own rigorous Code of Conduct which guides our business processes, decisions and behavior.” Olympus added that it “has implemented and will continue to enhance its robust compliance program.”