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J&J settles bribery charges for $70m

Johnson & Johnson has agreed to pay more than $70m in fines and other fees to settle corruption charges brought against the company by the US Department of Justice and the US Securities and Exchange Commission

Johnson & Johnson has agreed to pay more than $70m in fines and other fees to settle corruption charges brought against the company by the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC).

The company will pay $48.6m to settle the SEC's claims and a $21.4m fine to settle the DOJ's criminal charges.

The US government alleges that between 1998 and 2007, J&J subsidiaries used cash and vacations to bribe doctors and hospital administrators in Greece to buy J&J surgical implants for public hospitals; in Poland to award contracts to the company; and in Romania to prescribe J&J drugs. In all, the illegal activity resulted in about $32m in profits for the company, according to government filings.

"We are deeply disappointed by the unacceptable conduct that led to these violations," J&J chairman and CEO William C Weldon said in a statement. "We have undertaken significant changes since then to improve our compliance efforts, and we are committed to doing everything we can to ensure this does not occur again."

The settlements also address the US government's charges that J&J made $6.1m in profits as a result of illegal payments made by company subsidiaries to win contracts from the Iraqi government.  J&J gave in to the Iraqi government's demands between 2001 and 2003 for kickbacks as a condition of importing humanitarian goods into the country under the United Nations Oil for Food programme, according to the US government.

The DOJ noted that J&J has received a reduction in its criminal fine in return for what the government called the company's "extraordinary cooperation" with the DOJ and SEC, including assistance with the government's industry-wide investigation.

"Johnson & Johnson…cooperated extensively with the government and, as a result, has played an important role in identifying improper practices in the life sciences industry," said principal deputy assistant attorney general Mythili Raman of the Justice Department's Criminal Division.

11th April 2011

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