Johnson & Johnson, GE, Siemens, and Philips are being investigated by the FBI for an alleged kickback scheme that could span over two decades. According to a recent report by Reuters, these companies may have been part of a complex scheme designed to secure medical equipment contracts in Brazil through a series of bribes made to government figures.
While additional companies may also be involved, the four major players in this scheme appear to be Johnson & Johnson, GE, Siemens, and Philips, which are United States based companies worth a combined $600 billion. But, why would these companies target Brazil? When it comes to public healthcare programs, Brazil serves well over 200 million individuals, making it a valuable area to secure for related medical contracts. The alleged scandal is estimated to have been taking place for more than two decades, however Brazil’s recent anti-corruption push has lead to a series of investigations related to similar offenses.
According to the report, the companies involved in the kickback scheme strategically bribed government officials of Brazil to help them secure upcoming contracts, mainly in the medical equipment field. In addition to receiving the Brazilian partnerships fraudulently, several of the companies involved even charged the government of Brazil inflated prices for the supplied medical equipment. At times this inflation was eight times greater than the current market price, and the funds were then used to cover the cost of previous and future bribes. The medical equipment involved in these scandals were mainly magnetic resonance imaging machines and prosthetics.