It looks like John Ashcroft and the Justice Department
are engaged in a racketeering
From the sound of how this works, the US Justice Department goes after a corporation that may or may not have run afoul of the law. They tell the principles that they'll defer prosecution if they pay John Ashcroft's firm millions of dollars in protection money. If they agree to give John Ashcroft's firm the bribes, then the US Justice Department goes looking for another victim to squeeze for protection money.
This is a favorite tactic of organized crime and many a mob boss has been put in prison for this reason. As the old saying goes, the reason that the government doesn't like organized crime is that they don't like competition.
Now the Racketeering Conspiracy is wrapped up in the guise of a Compliance and Monitoring Program. This sounds innocent, except that this is a for profit enterprise. Increasingly, our US Justice Department has become more like a welfare patron for corporation handouts, than a department dedicated to making impartial decisions in regard to the law. When justice is no longer about truth and impartiality, but is instead dedicated to maximizing profits for ex-Employees and powerful connected corporations, then we have no justice at all.
There is evidence and confessions all around that the Neocon goal is to completely privatize all of the functions of the US government. And those private corporations will, one by one be purchased by Saudi Princes, just as are utility corporations and most of our banks are. John Ashcroft's justice business is likely to be expanded and then purchased by Saudi royalty.
The same people who cut off heads over insults to Islam, will have a powerful influence over how our courts operate.
Here is the text of the agreement
.United States Department of Justice
U.S. Attorney, District of New Jersey
970 Broad Street, Seventh Floor
Newark, New Jersey 07102
Christopher J. Christie, U.S. Attorney
More Information? Call the Assistant U.S. Attorney or other contact listed below to see if more
information is available.
News on the Internet: News Releases and related documents are posted at our website.
Go to: http://www.usdoj.gov/usao/nj/press/index.html
Public Affairs Office 973-645-2888
Michael Drewniak, PAO
Michael Drewniak, Public Information Officer FOR IMMEDIATE RELEASE
973-645-2888 Sept. 27, 2007
Five Companies in Hip and Knee Replacement Industry
Avoid Prosecution by Agreeing to Compliance Rules and Monitoring
NEWARK – Five companies that account for nearly 95 percent of the lucrative market in
hip and knee surgical implants have avoided criminal prosecution over financial
inducements paid to surgeons to use their products by agreeing to new corporate
compliance procedures and federal monitoring under 18-month agreements with the
Department of Justice, U.S. Attorney Christopher J. Christie announced today.
Zimmer, Inc., Depuy Orthopaedics, Inc., Biomet Inc., and Smith & Nephew, Inc., have
executed Deferred Prosecution Agreements (DPAs), which will expire in 18 months if
they meet all of their respective reform requirements. Criminal Complaints were also
filed today against those four companies, charging them with conspiring to violate the
federal anti-kickback statute. Those Complaints will be dismissed at the conclusion of
the DPAs if the companies comply with their terms.
The fifth company, Stryker Orthopedics, Inc., voluntarily cooperated with the U.S.
Attorney’s Office before any other company. Due to its cooperation, Stryker executed a
Non-Prosecution Agreement (NPA) with the government, under which Stryker is required
to implement all the reforms imposed on the other companies under the DPAs, including
18 months of federal monitoring.
The criminal Complaints accuse the four companies of using consulting agreements with
orthopedic surgeons as inducements to use a particular company’s artificial hip and knee
reconstruction and replacement products. The investigation revealed that this was a
common practice by the companies from at least 2002 through 2006. Surgeons who had
agreements with the companies were typically paid tens to hundreds of thousands of
dollars per year for consulting contracts and were often lavished with trips and other
Additionally, the four companies executing DPAs have reached civil settlements with the
Department of Justice and U.S. Department of Health and Human Services, Office of
Inspector General (HHS-OIG). The four companies have agreed to pay a total of $311
million to settle government claims under the anti-kickback statute and the civil federal
False Claims Act. They have also entered into five-year Corporate Integrity Agreements
(CIAs) with HHS-OIG. Those agreements require additional reforms and monitoring
under the supervision of HHS-OIG.
The financial settlements and CIAs release the four companies from any civil liability and
prevent them from being excluded from the Medicare reimbursement program by HHS
based on the conduct revealed in the investigation. Stryker did not enter into any civil
settlement with the Department of Justice or HHS. The company has not been given any
release from civil liability nor any release from HHS.
The five companies have all agreed to accept the appointment of federal monitors to
review compliance with the corporate reforms required of each of them. The companies,
the amount of their respective settlements and monitors are as follows:
• Zimmer Inc., based in Warsaw, Ind., will pay $169.5 million, and has agreed to be
monitored by former United States Attorney General John Ashcroft, currently Chairman
of the Ashcroft Group LLC of Washington, D.C.
• Depuy Orthopaedics, Inc., also based in Warsaw, Ind., a subsidiary of Johnson &
Johnson Corp. of New Brunswick, N.J., will pay $84.7 million, and has agreed to be
monitored by Debra Yang, the former U.S. Attorney for the Central District of California
in Los Angeles, and now a partner at Gibson, Dunn & Crutcher in Los Angeles.
• Smith & Nephew Inc., of Memphis, Tenn., will pay $28.9 million and has agreed to be
monitored by David Samson, the former Attorney General of the State of New Jersey, and
now a partner at Wolff & Samson in West Orange, N.J.
• Biomet Orthopedics, Inc., also of Warsaw, Ind., will pay $26.9 million, and has agreed
to be monitored by David N. Kelley, the former U.S. Attorney for the Southern District of
New York in Manhattan, and now a partner at Cahill, Gordon and Reindel in New York
• Stryker Orthopedics, Inc., of Mahwah, N.J., which has entered no civil settlement, has
agreed to be monitored by John Carley, former Senior Vice President for Legal Affairs at
Cendant Corp. and counsel to the Federal Trade Commission during the Reagan
“This industry routinely violated the anti-kickback statute by paying physicians for the
purpose of exclusively using their products,” Christie said. “Prior to our investigation,
many orthopedic surgeons in this country made decisions predicated on how much money
they could make – choosing which device to implant by going to the highest bidder. With
these agreements in place, we expect doctors to make decisions based on what is in the
best interests of their patients – not the best interests of their bank accounts.”
“Patients in federal health care programs deserve the best available treatment from
physicians and surgeons without the corrupting influence of kickbacks from the medical
device companies,” said Gary Heuer, Special Agent in Charge of the HHS-OIG in New
York. “We will continue to work closely with our law enforcement partners to vigilantly
investigate schemes meant to defraud Medicare, and to prosecute those individuals to the
fullest extent of the law.”
The financial inducements in the form of consulting agreements were entered into with
hundreds of surgeons throughout the 2002-2006 timeframe. The investigation revealed
instances in which physicians did little or no work for the financial inducements but did
agree to exclusively use the paying company’s products.
The physician consultants also failed to disclose the existence of these relationships with
the companies to the hospitals where the surgeries were performed and, more importantly,
to the patients that they treated.
The federal Department of Health and Human Services reports that more than 700,000
total hip and knee replacement surgeries are performed in the U.S. each year. The
investigation revealed that approximately two-thirds are performed on patients who are
covered by Medicare.
Among the key requirements common to the DPAs and NPA:
• A federal monitor will be in place at each company to review compliance with the DPAs
and NPA and all new and existing consulting relationships with the companies;
• Each company is required to conduct a needs assessment to determine the reasonable
needs for educational consulting services, and new product-development consultants.
• All new consulting agreements shall require physicians to disclose their financial
engagements with any company to their patients and require the companies to disclose the
name of each consultant and what they have been paid on the company website.
Compliance with the federal law by all of these companies going forward is the key
element of these agreements. When devising the new compliance standard for this
industry, the current Zimmer Corporate Compliance Program provided many of the
requirements contained in the Agreements.
The complete cooperation by the management of Smith & Nephew also played a role in
forming elements of the DPA. We appreciate the company’s willingness to deal with
these historical issues and, given its cooperation, we have complete confidence in the
company’s management, their commitment to compliance with the law through this new
compliance standard and the will to make sure it is enforced throughout their company.
The government’s willingness to enter into a DPA with Biomet was due, in part, to the
initiative they recently developed to strengthen their compliance processes, procedures
and controls. This evidence of commitment to strict compliance with the law and the
providing of resources to make it companywide in scope shows Biomet’s commitment to
changing its previous practices and those of the industry.
During the course of this investigation, the government discovered DePuy’s commitment
to conducting comprehensive health care compliance training for its employees and
independent sales force. We found that even before they knew of this investigation,
Depuy had voluntarily implemented reforms. Indeed, the substance of the DPA reflects a
number of Depuy’s reforms.
The settlement monies paid by the companies are to resolve the covered conduct detailed
in the Civil Settlement Agreements with the Department of Justice. The differential in the
respective civil settlement amounts is reflective of market share and other related business
factors during the relevant time period, and not the relative culpability among the
Christie credited Special Agents of the Department of Health and Human Services Office
of the Inspector General, New York Regional Office, under the direction of Special Agent
in Charge Gary Heuer; Special Agents of the United States Postal Inspection Service,
under the direction of Special Agent in Charge David C. Collins; and Special Agents of
the FBI, under the direction of Special Agent in Charge Weysan Dun, for their tireless
work which led to these agreements.
The criminal case was investigated and prosecuted by Counsel to the U.S. Attorney
Michele Brown and Assistant U.S. Attorney Kevin O’Dowd. AUSAs Brown and
O’Dowd were also ably assisted by Assistant U.S. Attorneys Marc Ferzan, Chief of the
Comercial Crimes Unit, and Grace Park. The civil case was handled by Assistant U.S.
Attorneys Rudolph Filko, Deputy Chief of the Civil Division, and Stuart Minkowitz,
Civil Health Care Fraud Coordinator.
For Zimmer – Frederick Robinson, Esq. of Fulbright & Jaworski for Zimmer
For Depuy – Walter Timpone, Esq. of McElroy, Deutsch, Mulvaney & Carpenter
For Smith & Nephew – David Vicinanzo, Esq. of Nixon, Peabody
For Biomet – Steven Immelt, Esq. of Hogan & Hartson
For Stryker – Herbert Stern, Esq. of Stern & Kilcullen