Eli Lilly announced in a regulatory filing last week that the Department of Justice has closed its Foreign Corrupt Practices Act investigation, without bringing any charges.
As Compliance Week previously reported, the drug company reached a $29.4 million civil settlement with the Securities and Exchange Commission in 2012 for FCPA violations. It further agreed to have an independent compliance consultant conduct a 60-day review of the company’s internal controls and compliance program related to the FCPA.
The settlement resulted from an SEC investigation of Eli Lilly affiliates in four countries—Brazil, China, Poland, and Russia—from 1994 through 2009. Lilly was first notified of the investigation in 2003.
The SEC alleged that Eli Lilly’s subsidiary in Russia used offshore “marketing agreements” to pay millions of dollars to third parties chosen by government customers or distributors, despite knowing little or nothing about the third parties beyond their offshore address and bank account information. When Eli Lilly became aware of possible FCPA violations in Russia and elsewhere, it did not curtail the subsidiary’s use of the marketing agreements for more than five years, the SEC stated.
The Justice Department launched a parallel investigation into the allegations. In its Form 10-K filing, dated Feb. 19, Eli Lilly said that the Justice Department advised the company in January that it has closed its investigation into this matter.
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