The SEC charged big pharma company, Sanofi, for violating the FCPA’s books and records and internal accounting controls provisions, and allegedly paying bribes across the Middle East and in Kazakhstan to gain more business opportunities.
Sanofi had their sales people create the money for bribes by submitting fraudulent travel and entertainment reimbursement claims, pooling the money and distributing it as bribes to expand the number of Sanofi product prescriptions. The company bribed officials in public hospitals and clinics in Jordan, Lebanon, Syria, Bahrain, Kuwait, Qatar, Yemen, Oman, and the United Arab Emirates between 2011 and 2013. These kickbacks were generated to ensure that Sanofi was awarded tenders and the payments were tracked on internal spreadsheets coded as “marzipans.”
Sanofi has agreed to pay $25.2 million to resolve these charges but did not admit or deny to the findings. The company will pay a civil penalty of $5 million, $17.5 million in disgorgement, and $2.7 million in prejudgment interest.
There are still significant risks in the pharmaceutical industry and bribery is a major problem in connection with sales. Charles Cain, Chief of the SEC’s FCPA unit, believes that more work needs to be done to address this issue in the pharmaceutical industry.
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