Former DePuy executive Robert John Dougall has pleaded guilty today at Southwark Crown Court after admitting his involvement in £4.5 million corrupt payments to medical professionals within the Greek state healthcare system. He has been sentenced to 12 months imprisonment. Recognising the important public interest issues raised in this case, the Judge gave Mr Dougall leave to appeal.
Background
In 1999, DePuy International Limited ("DPI"), through its parent company, was acquired by US health products firm Johnson & Johnson ("J&J").
Robert John Dougall (DOB 25 April 1965) was appointed Director of Marketing at DPI in 1999. From 2000 he was given additional responsibility for business development in Greece. DPI sold orthopaedic products in various markets - this case involved the corrupt obtaining and retaining of business in the Greek orthopedic market by providing inducements/rewards to surgeons who would purchase DPI's products.
DPI used a local distributor, Medec S.A., which was owned and run by Mr Nikolaos Karagiannis. Historically, and prior to Dougall's involvement, DPI paid "commission" in advance on all sales made by Medec, into an Isle of Man registered company called Madison Management Limited, (also owned by Karagiannis). A proportion of these commissions were understood within DPI to be used by Karagiannis to induce or reward surgeons to use DPI products. Later other methods were used to provide "cash incentives" or so called "Professional Education", alternatively "Prof Ed" which were no more than euphemisms to make corrupt payments. During the indictment period beginning in February 2002 the level of funds made available to Karagiannis for "Prof Ed" purposes was a standard 20% of the value of end-user sale price.
In 2004, when DPI decided to terminate the use of intermediaries in the Greek market, Dougall indicated that terminating the use of intermediaries would result in a 95% loss on their Greek turnover.
During the period covered by the indictment (February 2002 to December 2005) the total corrupt sums involved amounted to around £4.5 million. The effect of the conduct was that the Greek taxpaying public funded the corrupt payments.
Dougall acted to carry out the corporate intention of DPI. He neither sought nor gained personal benefit related to the corrupt arrangements.
Dougall has today been sentenced by Mr Justice Bean to 12 months imprisonment.
Commenting on today's proceedings, SFO Director Richard Alderman said "It is satisfying when corruption has been admitted, the offender co-operated and has been dealt with swiftly. I hope that today's outcome will be seen as an example of how such cases can be resolved effectively".
Investigation and Proceedings
The investigation commenced following a referral by the US Department of Justice in October 2007. It was formally accepted by the SFO for investigation on 4 March 2008.
Dougall is the first "co-operating defendant" in a major SFO corruption investigation.
Dougall has co-operated fully with and provided substantial assistance to the SFO and is subject to an agreement with the SFO subject to section 73 of the Serious Organised Crime and Police Act 2005, signed 10 June 2009.
The investigation into the roles and involvement of others is ongoing.
This investigation has been conducted in partnership with the West Yorkshire Police Economic Crime Unit.
Indictment
JOHN DOUGALL, between the 13th day of February 2002 and the 1st day of January 2006, conspired with DePuy International Limited and others to make corrupt payments and/or give other inducements contrary to section 1 of the Prevention of Corruption Act 1906 to agents of the Hellenic Republic, namely medical professionals working within the public healthcare system in the Hellenic Republic, in relation to the award of contracts for the supply of orthopaedic products in favour of DePuy International Limited.
