Risk & Compliance

Fresenius Medical Fined $231M in Bribery Probe

The German medical device company allegedly paid $31 million in bribes to doctors and public health officials in at least 17 countries.
Matthew HellerApril 1, 2019

German medical device company Fresenius Medical Care has agreed to a $231 million settlement of allegations that it paid nearly $30 million in bribes to government-employed doctors and public health officials in at least 17 countries.

The allegations against the world’s largest provider of dialysis equipment and services included violations of the Foreign Corrupt Practices Act’s anti-bribery and accounting provisions dating from at least 2009 through 2016.

According to the U.S. Securities and Exchange Commission, bribes were paid to procure business throughout Fresenius’s operations, with the company benefiting by more than $135 million from the improper payments.

As part of the settlement, Fresenius will pay $147 million in disgorgement and interest to the SEC and a criminal fine of $84.7 million to the Department of Justice. The company also agreed to retain an independent compliance monitor for at least two years.

“By engaging in widespread bribery schemes across multiple countries, the company prioritized profits over compliance in its dealings with foreign government officials,” Tracy Price, deputy chief of the SEC Enforcement Division’s FCPA Unit, said in a news release.

The SEC said Fresenius employees made improper payments through a variety of schemes, including using sham consulting contracts, falsifying documents, and funneling bribes through a system of third party intermediaries.

“Fresenius failed to properly assess and manage its worldwide risks, and devoted insufficient resources to compliance,” the commission said. “In many instances, senior management actively thwarted compliance efforts, personally engaging in corruption schemes and directing employees to destroy records of the misconduct.”

The illicit activity allegedly occurred in Saudi Arabia, Angola, eight countries in West Africa, Morocco, Turkey, Spain, China, Serbia, Bosnia, and Mexico.

In Morocco, the DoJ said, Fresenius paid bribes through a sham commission to a Moroccan state official to obtain contracts to develop kidney dialysis centers at Moroccan state-owned military hospitals, while in Spain it paid a publicly employed doctor more than 81,000 euros through a fictitious consulting agreement.

“Fresenius doled out millions of dollars in bribes across the globe to gain a competitive advantage in the medical services industry,” Assistant Attorney General Brian Benczkowski said.