Biomet Bribery Probe Looms Over Zimmer Merger (Medical Device Online)
The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are reportedly conducting a probe into bribes allegedly made by Biomet Inc. to health providers in Brazil and customs officials in Mexico. The investigation is unlikely to stop the proposed merger between Biomet and Zimmer Holdings Inc., but Biomet could face stiff penalties.
According to confidential documents obtained by the New York Times, an anonymous email from a whistleblower sent in October 2013 tipped Biomet's officials that its local distributors in Brazil had been "paying kickbacks" to government physicians to entice them to buy the company's orthopedic devices. Days later, the company's customs broker in Mexico reportedly told Biomet that dental device shipments coming across the border were handled "in an irregular way," implying that bribes were made to Mexican customs officials, the NYTreported.
In response, Biomet fired erring employees and reported misconduct to government officials, according to theNYT. The company in April and May also presented evidence of the dealings in Mexico and Brazil to investigators aft...
