Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Another Olympus fiasco, with $640M penalty. No individual prosecutions.

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Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

The U.S. unit of Olympus admitted it made payments to doctors and hospitals as an inducement to buy Olympus equipment. The company agreed yesterday to pay $646M and enter into two deferred prosecution agreements in return for settling two criminal charges.

I don’t usually follow Foreign Corrupt Practices Act settlements, but this one caught my eye. I’ve not previously been aware of the Anti-Kickback Statute, which prohibits kickbacks from vendors to health care providers in the federal medical reimbursement marketplace. Olympus admits to violating both sets of laws.

More info at:

The company generated $600M of sales with gross margin of $230M in the involved transactions, according to the coverage.

The DoJ press release lists every federal office and every lead attorney who helped on the case.

Noticeably missing is any indication of individuals at Olympus being held responsible. The DoJ press release indicates that senior-level and mid-level staff were involved. Yet no hint of individual prosecutions.

Sadly, this leaves us in the same situation as other prosecutions I’ve noticed in recent history: the stockholders pick up the tab and the individuals who engineered the now-admitted illegal activity walk away.

Eh, a bad quarter for the stockholders.

Written by Jim Ulvog

March 2, 2016, 8:32 am at 8:32 am

Posted in Fraud, Other stuff

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