Biomet said yesterday that the U.S. Justice Dept. extended by a year the deferred prosecution agreement reached in 2012 over alleged violations of the Foreign Corrupt Practices Act.
Biomet paid $22 million in March 2012 to settle the case with the Justice Dept. and the U.S. Securities & Exchange Commission.
The DoJ alleged that Biomet and its subsidiaries paid out more than $1.5 million in illegal kickbacks to employees of state-owned health services in Brazil and China. In addition to the monetary penalties, Biomet agreed to set up an independent external compliance monitor to keep an eye on the company’s international sales practices.
Last July, an SEC subpoena prompted Biomet to reveal that it "became aware of certain alleged improprieties regarding its operations in Brazil and Mexico" in October 2013 and retained lawyers and "other experts" to investigate.
Yesterday the Warsaw, Ind.-based orthopedics giant said it learned March 13 that the DoJ extended the DPA and an independent compliance monitor’s appointment for another year.
"The DoJ has informed Biomet that it retains its rights under the DPA to bring further action against Biomet relating to the conduct in Brazil and Mexico disclosed in 2014 or the violations set forth in the DPA," the company said. "The DoJ could, among other things, revoke the DPA or prosecute Biomet and/or the involved employees and executives. Biomet continues to cooperate with the SEC and DoJ and expects that discussions with the SEC and the DoJ will continue."
Biomet is on the cusp of closing a $13.35 billion merger with cross-town rival Zimmer (NYSE:ZMH), which could come as soon as the end of this month. Last week Zimmer said it would float a $7.7 billion bond offering to help cover the cash portion of the Biomet buy.