On Thursday, 24 October, the SEC said that medical device and equipment maker Stryker Corporation will pay $13.2 million to resolve FCPA violations. As described in the published settlement, U.S.-headquartered Stryker bribed doctors and administrators at government-controlled hospitals in Argentina, Greece, Mexico, Poland, and Romania. The bribes totaled about $2 million and were ‘incorrectly described as legitimate expenses in the company’s books and records,’ according to the SEC.
The SEC said Stryker described the bribes in its books and records as charitable donations, payments for consulting and service contracts, travel expenses, and commissions. The company made $7.5 million in profits as a result of the bribes. Some of the facts disclosed in the settlement include the following:
- In 2006, Stryker’s subsidiary in Mexico directed a law firm to pay about $46,000 to a Mexican government employee in order to secure the winning bid on a contract. Stryker made $1.1 million in profit on the deal
- In Greece, Stryker’s subsidiary there made a purported donation of nearly $200,000 in 2007 to a public university to fund a laboratory that was a pet project of a public hospital doctor, the SEC said.
- In Poland, Stryker paid travel costs for the director of a public hospital and her husband in 2004. ‘This included a six-night stay at a New York City hotel, attendance at two Broadway shows, and a five-day trip to Aruba.’ The expenses, totaling approximately US$7,000, were recorded by Stryker Poland as a legitimate travel expenses. Stryker Poland also made additional improper travel payments, payments under purported consulting agreements totaling approximately $47,000, and gifts and donations of nearly $400,000, each of which was made to a state-employed healthcare professional for the purpose of Stryker Poland’s obtaining or retaining the business of public hospitals.
See SEC Press Rel. 2013-229, SEC Charges Stryker Corporation with FCPA Violations (Oct. 24, 2013); and SEC Enforcement Actions: FCPA Cases