The Department of Justice said in a court filing this month that it has determined that Biomet breached the terms of a deferred prosecution agreement that the medical device maker entered into with the government in 2012.
As Compliance Week previously reported, Biomet entered into a DPA with the Justice Department, and a parallel consent agreement with the SEC for possible violations of the Foreign Corrupt Practices Act. Under that DPA, the government agreed to defer prosecution of Biomet if the company satisfied its obligations under the DPA.
These obligations required Biomet to implement and maintain a compliance and ethics program designed to prevent and detect violations of the FCPA and other applicable anti-corruption laws throughout its operations. The DPA had a three-year term and could be extended for up to one year if the government determined, in its sole discretion, that Biomet had knowingly violated any provisions of the DPA. Biomet also agreed that an independent compliance monitor would review its compliance program to determine whether it was reasonably designed and implemented to detect and prevent violations of the anti-corruption laws and was functioning effectively.
Then, in October 2013, Biomet became aware of certain alleged improprieties regarding its operations in Brazil and Mexico, including alleged improprieties that predated the entry of the DPA. Last year, the Justice Department decided to extend Biomet’s DPA, and its independent compliance monitor appointment, for an additional year after the company self-reported in a Form 8-K these additional potential violations.
In March 2016, the Justice Department filed a status report to the court, in which it said the Brazil and Mexico conduct was under review. According to court documents, the government notified Biomet in April that it had determined that “Biomet had breached the DPA based on the conduct in Mexico and Brazil, and based on Biomet’s failure to implement and maintain a compliance program as required by the DPA.”
“Biomet has represented that it is committed to continuing to cooperate, and the government and Biomet have been in discussions to resolve this matter, which would obviate the need for a trial,” the court document stated. “Those discussions are ongoing.”