Bio-Rad to Pay $55 Million for Violations of the Foreign Corrupt Practices Act
The DOJ stated that it entered into a nonprosecution agreement due largely to Bio-Rad’s self-disclosure and full cooperation. According to the SEC, Russian Agents received $4.6 million on sales of $38.6 million; Bio-Rad’s Vietnam office made $2.2 million in improper payments, generating sales of $23.7 million; and Bio-Rad’s Thai distributor made $708,608 in improper payments, resulting in $5.5 million in sales. The company’s third quarter SEC filing stated that in May authorities in China investigated the firm’s business practices, resulting in an administrative penalty and disgorgement of profits of $0.3 million for “providing free products pursuant to contractual obligations with customers during years 2012 and 2013.” Chinese authorities are also reviewing Bio-Rad’s importation practices of certain products. Thanh Nien reported this month that Vietnamese authorities are also conducting an investigation.
Hercules, CA 11/3/14; Washington, DC 11/3/14; Washington, DC 11/3/14—Life science and diagnostics products firm Bio-Rad Laboratories has fully resolved the US Department of Justice (DOJ) and SEC investigations into violations of the Foreign Corrupt Practices Act. The violations occurred between 2005 and 2010, were related to Thailand, Vietnam and Russia, and involved both life sciences and clinical-diagnostics products. Bio-Rad self-reported the misconduct in 2010 (see IBO 5/15/10) and cooperated with the investigation. Under a nonprosecution agreement with the DOJ, the company will pay a $14.35 million criminal fine. As part of a civil settlement with the SEC, Bio-Rad will pay $40.7 million in disgorgement and prejudgment interest. The company also agreed to certain reporting, compliance and self-monitoring provisions over the next two years. “We took strong, decisive action to end the problematic practices and prevent anything like this from happening in the future, including terminating involved employees and committing substantial resources to strengthening our compliance functions and financial controls,” said Bio-Rad President and CEO Norman Schwartz. According to the DOJ and SEC, Bio-Rad subsidiaries made $7.5 million in improper payments to foreign officials and improperly recorded the payments as legitimate expenses, resulting in $35.1 million in profits.
