Immucor: A Hospital Payment Disguised as Swiss Consulting

The Immucor FCPA case led its chief executive to agree to a $30,000 civil penalty over an alleged payment to a Milan public-hospital director disguised as Swiss consulting work. The Securities and Exchange Commission brought cases against the company and the officer under the Foreign Corrupt Practices Act over a payment whose explanation changed as it moved toward approval. If you know the hospital account, the conference arrangements or the invoice, you may recognize the gap between what a company bought and what its books say it bought.

The agency’s announcement of the officer’s settlement described the alleged exchange: a payment for favoring Immucor in selecting supplies and equipment. Its separate order against Immucor and the officer identified the recipient more precisely as the director of the hospital’s blood bank. That order also explained why the supply contract mattered after the equipment had already been sold.

The Blood-Testing Machine Was Only the Beginning

Immucor’s hospital business included both blood-testing equipment and the supplies that kept it running. The order described Immucor as a maker of blood-testing products for hospital blood banks and labs. Its Galileo system required reagents, strips and other supplies to analyze blood samples.

According to the order, Immucor Italia, the company’s Italian subsidiary, sold an earlier generation of blood-testing units to Niguarda Hospital in Milan in January 2002. The associated contract brought regular purchases of the supplies necessary to operate the units. When Galileo units later replaced the earlier machines, the supply contract and its income continued.

That continuing business was central to the SEC’s account of the payment. The agency said the blood-bank director had an upcoming decision about renewing the Galileo supply contract, which was due to expire in January 2005.

This is a useful distinction in medical-device bribery: the equipment order and the supply relationship can put different decisions in play. Here, the agency tied the proposed benefit to the director’s commercial decisions, including renewal. A person who knows the renewal discussions may understand the payment’s purpose better than someone seeing only the expense entry.

One Payment, Changing Explanations

The Securities and Exchange Commission found that Immucor Italia, acting through a local sales agent, offered the blood-bank director €13,500 in or about February 2004 to influence his commercial decisions for Immucor’s benefit. The order valued that payment at approximately $16,119, against the officer’s later $30,000 civil-penalty agreement. The agency said the director accepted the offer and the agent described the money in a payment request as overdue compensation for a medical conference.

According to the order, the conference was real: Immucor’s president and chief operating officer had arranged for the director to plan and chair an October 2003 conference in Italy related to Galileo. The agency said the officer agreed to compensate him and reimburse expenses, although they never discussed the amounts. The order said the director requested a payment arrangement that would let him avoid Italian income taxes, and the officer agreed.

By February, the director had submitted no request for conference compensation or expenses, according to the order. It said the local sales agent nevertheless used overdue conference compensation as the explanation for the proposed payment and requested that it go to a Swiss bank account for the director’s benefit. The conference supplied a business event to attach to the payment.

The description changed again at approval. The order found that the officer authorized payment through Immucor’s German subsidiary and approved an invoice describing consulting services connected to Galileo opportunities in Switzerland. The order said he knew the director had never performed that work. The agency alleged the money went out in April 2004.

On the agency’s account, we have an Italian conference on the payment request and Swiss consulting on the invoice. Same money. New story. The order tied the offer to the hospital director’s purchasing authority. For an insider, the changing explanation is the thread connecting the sales request, the officer’s approval and the accounting entry.

What Conduct Can Violate the FCPA?

In Immucor’s case under the Foreign Corrupt Practices Act, the Securities and Exchange Commission found both a payment intended to influence a foreign official’s business decision and accounting failures that concealed its purpose. Its books-and-records and internal accounting controls findings concerned how the invoice was recorded and the controls over those records. The agency also found an anti-bribery violation arising from the Italian subsidiary’s actions.

According to the order, Immucor recorded the disbursement as an expense for consulting services that never occurred and kept the false invoice in its records. The entry and its supporting document told the same false story.

The controls finding addressed the system behind that entry. The agency found that Immucor had failed to maintain internal accounting controls sufficient to provide reasonable assurance that its accounts were accurately stated. Its order also found that the officer’s conduct violated the accounting rules and caused the company’s accounting violations.

For a finance employee, the approval itself can therefore be part of the story. The order described an officer authorizing an invoice for work he knew had never been performed. Someone familiar with the actual engagement may be able to explain what an apparently approved expense leaves out.

The Company Order and the Officer’s Settlement

The Securities and Exchange Commission’s September 27, 2007 administrative order covered Immucor and its officer. It told the company to stop breaking the bribery and accounting rules, and the officer to stop breaking the accounting rules or causing the company to break them.

The following day’s announcement described a separate settled civil action against the officer in federal court in Georgia. The officer agreed to a civil penalty, while the company received the order to stop. We have a payment meant to protect the company’s supply business, according to the agency, and a penalty agreement belonging to the officer.

Hospital Payments Can Disappear Into Ordinary Expenses

The purchasing role of the recipient explains why healthcare sales records matter alongside the invoice. In a 2015 speech by the Securities and Exchange Commission’s enforcement director, he described how doctors, pharmacists and administrators at public hospitals often decide which products their institutions buy. The speech connected that authority in public health care to payments intended to influence purchases, including medical devices.

The speech also described a different payment route: a distributor’s margin can supply cash for bribes while the extra layer of cash flow helps the company record payments as ordinary expenses. That comparison brings the customer’s price, the intermediary’s earnings and the ultimate beneficiary into the same picture. Immucor’s order supplies its own concrete route through the local sales agent, the German subsidiary and the requested Swiss account.

The agency’s separate order concerning Fresenius Medical Care shows how moving a payment outside a manufacturer’s expense account can obscure it. The order described a regional finance director explaining why lower revenue was acceptable:

The 2022 Journal of Forensic and Investigative Accounting paper Fresenius Medical Care: A Case Study on the FCPA examined the persistence of these schemes despite internal warnings. Its conclusion gives an insider’s memory of earlier arrangements particular weight:

In the agency’s Fresenius account, the supplier absorbed the payments and the manufacturer’s expenses looked smaller. In Immucor’s, the agency found the invoice carried a service description the approving officer knew was false. Both show why understanding the commercial arrangement matters as much as reading the account label.

The Insider Who Knows What the Invoice Leaves Out

The useful payment evidence connects the hospital decision, the claimed service, the approval and the beneficiary. Immucor’s case makes those connections tangible: a supply renewal, an earlier conference, a payment request and a different description on the invoice. Sales, conference administration and finance could each hold knowledge that explains a different part of that sequence.

We work with you to connect what you know about the business to the transactions it explains. An invoice reviewer may know the work was never done; someone managing the hospital account may know why the renewal mattered. Talk with our whistleblower experts about the part you know.

Eligible SEC whistleblowers can receive 10% to 30% of collected monetary sanctions when the enforcement action exceeds $1 million in sanctions. We assess how the program applies to your information and, if it also concerns false claims on U.S. government money, we look at that with you too. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Why the Description Changed

If a hospital payment reached your desk under a description you knew was false, talk with our whistleblower experts about the transaction behind it. We develop the case with you and bring in foreign bribery whistleblower lawyers who understand medical-device sales and cross-border payments. You bring the knowledge of the business; we bring the judgment and partnership to pursue what it reveals.