On February 9, 2021, the US District Court for the District of Columbia dismissed the superseding information against Zimmer Biomet Holdings, Inc., an Indiana-based medical device manufacturer, bringing an end to the Company’s January 2017 deferred prosecution agreement with the US Department of Justice. The dismissal followed a February 5, 2021 motion by the DOJ stating that Zimmer had “fully met its obligations” under the 2017 DPA.
Zimmer’s 2017 DPA concerned pre-acquisition conduct by Biomet, Inc. (which Zimmer acquired in 2015), and stemmed from Biomet’s failure to comply with a prior March 2012 DPA it had entered into with the DOJ in connection with allegations that Biomet had violated the anti-bribery and accounting provisions of the US Foreign Corrupt Practices Act. Those allegations related to improper payments made by Biomet and its subsidiaries between 2000 and 2008 in China, Argentina, and Brazil. In the March 2012 DPA, Biomet agreed to pay a fine of $17.3 million, hire an independent monitor for 18 months, and implement enhanced anti-corruption controls. Biomet also entered into a simultaneous consent agreement with the SEC, under which it agreed to pay an additional $5.5 million in disgorgement and prejudgment interest.
Over the next several years, Biomet’s monitor term was repeatedly extended as a result of Biomet’s discovery of additional potentially improper activities in Mexico and Brazil. In January 2017 Zimmer entered into a new DPA with the DOJ relating to alleged violations of the FCPA’s internal controls provisions, under which it acknowledged that Biomet had failed to comply with the terms of the 2012 DPA, and agreed to pay $24 million in penalties, disgorgement, and pre-judgment interest, and appoint an independent monitor for three years. Zimmer also agreed to an administrative resolution with the SEC for this same misconduct, under which Zimmer paid an additional $13 million in penalties, disgorgement, and prejudgment interest. The monitorship concluded in August 2020.