Johnson and Johnson Controls

452 Words2 Pages
Johnson & Johnson Corruption Case Johnson & Johnson, a global manufacturer of pharmaceuticals, medical devices, biotechnology and personal hygiene products, was under close investigation beginning in 2007 by the United States Department of Justice as well as other government authorities. This paper will explain the fraud that took place, tie the behavior of the culprits to fraud theories, examine the impact of the corruption, and conclude with the repercussions that took place for this fraudulent activity. First of all, Johnson & Johnson was accused with bribing doctors in Greece, Poland, and Romania with monetary payments and travel gifts in exchange for prescribing J&J products to their patients. The bribes to Greek Doctors typically amounted to 20% of the purchase price of J&J equipment. In order to hide these illegal transactions, J&J used “sham contracts, off-shore companies and slush funds.“(Fox 1). According to the SEC, these bribe payments date back to 1998. In addition to these bribe payments, J&J subsidiaries were also accused of paying kickbacks to the Iraqi government in efforts to obtain contracts for the United Nations Oil for Food Program. Secondly, the fraud theories that I believe tie to the behavior of the culprits are the elements that make up the fraud triangle. Perhaps there was a perceived opportunity to increase sales if they offered bribe payments and travel gifts. Pressure could have also been a factor. Maybe the sales representatives were under pressure to meet certain sales quotas, thus resorting to bribery. Also, I believe the third element of the fraud triangle; rationalization, played a role because if one can increase his or her sales, maybe there will be a promotion or bonus given to you. Thirdly, I will transition in to the impact of this corruption. This misconduct resulted in hefty fines to be paid by J&J.
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