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Drug company titan Johnson & Johnson Thursday agreed to pay $70 million to settle civil and criminal bribery charges, and signed a deferred prosecution agreement containing five pages of required compliance reforms. The government said in its complaint that between 1998 and 2007 J&J paid bribes to public doctors in Greece who selected J&J surgical implants for their patients, to doctors and public hospital administrators in Poland to obtain business, to public doctors in Romania to prescribe its products, and to Iraq in order to obtain contracts under the United Nations Oil for Food Program. “The message in this and other FCPA cases is plain – any competitive advantage gained through corruption is a mirage,” said Robert Khuzami, director of enforcement for the Securities and Exchange Commission. “J&J chose profit margins over compliance with the law by acquiring a private company for the purpose of paying bribes, and using sham contracts, off-shore companies, and slush funds to cover its tracks,” he added. As part of the three-year prosecution agreement with the Department of Justice, the company accepted its responsibility for the actions and agreed not to dispute them. The agreement was signed by Russell Deyo, J & J general counsel, and by Eric Dubelier, the Reed Smith partner who represented the company. In a statement chief executive William Weldon said, “More than four years ago, we went to the government to report improper payments and have taken full responsibility for these actions. We are deeply disappointed by the unacceptable conduct that led to these violations.” A company spokesman said no one would discuss the settlement beyond the released statement. Based in New Brunswick, New Jersey, J&J has more than 100,000 employees working in 250 countries. It reported $61.6 billion in annual sales last year. In its consent agreement with the SEC, the company agreed to pay more than $48.6 million in disgorgement and prejudgment interest. [insert SEC litigation release here] Another $21.4 million represents the criminal fine, with a criminal information filed against DePuy, Inc., a subsidiary. It will be dismissed if the company fulfills its obligations under the agreement. J&J said it expects to resolve a related investigation by the United Kingdom Serious Fraud Office within “several days.” The government praised the company for voluntarily disclosing the majority of its violations and undertaking reforms over the past four years. J&J must report to the Justice Department on its compliance efforts at no less than six-month intervals. It also must name a chief compliance officer as well as a head of compliance within each business unit. Mythili Raman, principal deputy assistant attorney general, said the company’s cooperation in the investigation “has played an important role in identifying improper practices in the life sciences industry. As today’s agreement reflects, we are committed to holding corporations accountable for bribing foreign officials while, at the same time, giving meaningful credit to companies that self-report and cooperate with our investigations.” .

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