AGA Medical Corporation, a medical device manufacturer, has agreed to pay a $2 million civil penalty for making corrupt payments to Chinese government officials in violation of the Foreign Corrupt Practices Act (FCPA) according to Matthew Friedrich, acting assistant attorney General for the United States Department of Justice.

The complaint was filed in United States District Court in Minneapolis, and charged AGA with conspiring to make bribe payments to Chinese officials and violating the FCPA, which prohibits corrupt payments to foreign officials for the purpose of obtaining or keeping business.

AGA makes products designed for the minimally invasive treatment of congenital heart defects. The company is accused of making payments to Chinese government officials to cause government-owned hospitals and government-employed physicians to purchase AGA products rather than competitors' products, and cause the Chinese Patent Office to approve AGA's patent applications.

The corrupt payments were made between 1997 and 2005. AGA's Attorney Ron Lund said that the company did voluntarily disclose the problem to the government following an internal investigation and put in procedures to eliminate such occurrences happening again. He said that AGA has been working with the Justice Department to end the case and is looking forward to putting the case behind it.

AGA Medical has stopped doing business with its distributor in China who was involved in the allegations.

According to the United States Department of Justice prosecution will be delayed for three years, and it will dismiss the criminal information at the end of a three-year period if AGA abides by terms of an agreement the two sides have reached, which calls for a $2 million civil penalty. AGA must also implement enhanced compliance policies and procedures, and engage an independent corporate monitor.

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