AGA Medical Corporation (AGA), a privately-held medical device manufacturer, was charged last month with bribing Chinese officials. But, by having its prosecution deferred, the company will get out of the problem by paying $2 million. AGA specializes in the manufacture of products designed for the minimally invasive treatment of congenital heart defects. The two-count criminal information charged AGA with one count of conspiring to make bribe payments to Chinese officials and one count of violating the FCPA in connection with the authorization of specific corrupt payments to officials in China.

It was alleged that between 1997 and 2005, AGA, a high-ranking officer of AGA and other AGA employees agreed to make illegal payments to doctors in China who were employed by government-owned hospitals and caused those payments to be made through AGA’s local Chinese distributor. In exchange for these payments, the Chinese doctors directed the government-owned hospitals to purchase AGA’s products rather than those of AGA’s competitors. The criminal information also alleges that from 2000 through 2002, AGA sought patents on several AGA products from the People’s Republic of China State Intellectual Property Office. As a part of this effort, AGA and a high-ranking officer of AGA agreed to make payments through their local Chinese distributor to Chinese government officials employed by the State Intellectual Property Office in order to have the patents approved.

Source: Corporate Crime Reporter

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