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Unhealthy Business Practices Overseas Infect Health Care Companies


On May 20, 2005, the U.S. Department of Justice announced that a Chinese subsidiary of Los Angeles-based Diagnostic Products Corp. had agreed to plead guilty and pay a $2 million fine for violating the Foreign Corrupt Practices Act by making cash payments to physicians and lab personnel employed at government-owned hospitals in the People's Republic of China, while the U.S. parent entered into a civil settlement with the SEC and agreed to disgorge $2.8 million in profits and pre-judgment interest. Meanwhile, on the very same day, a jury in Alabama acquitted two former Health South employees being prosecuted under the FCPA (and under the Travel Act for violation of the Alabama commercial bribery statute) for falsely recording in Health South's books as a consulting agreement a bribe paid to the Director of a Saudi Arabian foundation from whom Health South was seeking a $50 million contract to manage a hospital owned by the foundation.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Alan W. H. Gourley
Partner – Washington, D.C.
Phone: +1 202.624.2561

Crowell & Moring LLP is an international law firm with more than 500 lawyers representing clients in litigation and arbitration, regulatory, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity. The firm has offices in Washington, DC, New York, Los Angeles, San Francisco, Orange County, London, Brussels, and Shanghai.

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