The new chairman of Tokyo-based Olympus Corp. said the company may have violated the Foreign Corrupt Practices Act with a doctor-training program in Brazil.
Yasuyuki Kimoto, who started in April, told Bloomberg that the medical-device company discovered irregularities pertaining to travel, meals and entertainment for doctors at a Brazilian training center. The company reported the findings to the Justice Department “four to five months ago,” Kimoto said.
Payments to foreign officials to secure business are a violation of the FCPA. In many investigations, the Justice Department has said that foreign doctors meet the definition of a foreign official.
U.S. enforcers have probed numerous companies in the medical device industry and most recently reached a $7.4 million settlement with Orthofix International N.V. related to bribery allegations in Mexico. The investigations are part of a medical device industry sweep that began in 2006, after Johnson & Johnson disclosed to the Justice Department and Securities and Exchange Commission a potential foreign bribery problem in Greece.
“We might agree to some sort of violation of the Foreign Corrupt Practices Act in Brazil,” Kimoto told Bloomberg. “We understand DOJ is trying to gather lots of information on us.”
Olympus has already been wrapped up in a billion dollar accounting scandal.
Former CEO Michael Woodward resigned in October and went public about investigations of suspicious acquisitions he had tried to pursue before being pushed out.
In November, the company admitted to concealing more than $1 billion in investment losses by paying inflated prices for mergers and acquisitions.
Olympus replaced its entire board in April and said in May that it was setting up a new compliance committee.
Kimoto told Bloomberg that the Justice Department and the Food and Drug Administration were looking into the company’s marketing operations. He said he didn’t know whether the probe of Olympus was part of a broader industry investigation.
Olympus, which is traded in Tokyo, has a U.S. subsidiary based in Pennsylvania. Olympus also makes digital consumer products such as cameras and voice recorders.
A spokesperson from the Justice Department did not immediately respond to a request for comment.
