In re Fresenius Medical Care AG

 
 
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UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 85468 / March 29, 2019 
 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 4033 / March 29, 2019 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-19126 
 
 
In the Matter of 
 
Fresenius Medical Care AG 
& Co. KGaA 
 
Respondent. 
 
 
 
 
CORRECTED ORDER INSTITUTING 
CEASE-AND-DESIST PROCEEDINGS 
PURSUANT TO SECTION 21C OF THE 
SECURITIES EXCHANGE ACT OF 1934, 
MAKING FINDINGS, AND IMPOSING A 
CEASE-AND-DESIST ORDER  
  
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Fresenius Medical Care AG & Co. KGaA 
(“FMC” or “Respondent”). 
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, Respondent admits the Commission’s 
jurisdiction over it and the subject matter of these proceedings, and consents to the entry of this 
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities 

 
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Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as 
set forth below. 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds that:  
 
  Summary  
1. This matter concerns violations of the anti-bribery, books and records and internal 
accounting controls provisions of the Foreign Corrupt Practices Act of 1977 (the “FCPA”) [15 
U.S.C. 78dd] by FMC, a world-wide provider of products and services for individuals with chronic 
kidney failure headquartered in Bad Homburg, Germany.  From at least 2009 through 2016, 
millions of dollars in bribes were paid to procure business throughout its operations, including in 
Saudi Arabia, Angola, and eight countries in the West African region.  Further, in FMC’s 
operations in those countries, as well as Turkey, Spain, China, Serbia, Bosnia, and Mexico, 
payments were not accurately reflected in FMC’s books and records.  FMC also failed to have 
sufficient internal accounting controls in place, which contributed to the misconduct continuing for 
many years across multiple continents.  In connection with the misconduct described in Saudi 
Arabia, West Africa, and Angola, FMC employees and agents utilized the means and 
instrumentalities of U.S. interstate commerce, including the use of internet-based email accounts 
hosted by numerous service providers located in the United States.   The company benefitted by 
over $135 million as a result of the improper payments.   
Respondent  
  
 
2. FMC is a provider of products and services for individuals with chronic kidney 
failure.  FMC, operating in over 150 countries, is incorporated under the federal laws of Germany 
and is headquartered in Bad Homburg.  Since 1996, FMC’s American Depositary Shares traded on 
the New York Stock Exchange under the ticker “FMS” and are registered with the Commission 
pursuant to Section 12(b).  The company files periodic reports, including Form 20-F, with the 
Commission pursuant to Section 13(a) of the Exchange Act.   
 
Relevant Entities 
 
3. The misconduct took place in FMC subsidiaries in Morocco, Portugal, Angola, 
Turkey, Spain, China, Serbia, Bosnia, and Mexico.  During the relevant time period FMC’s West 
Africa business was managed and operated from Fresenius Medical Care Deutschland GmbH, a 
limited liability company organized under the federal laws of Germany, and was later operated 
from FMC Morocco. The financials for each subsidiary were consolidated with those of FMC.   
 
4. Saudi Advanced Renal Services Ltd. (“SRS”) is a wholly consolidated distributor 
that promotes and sells FMC’s products in the Kingdom of Saudi Arabia pursuant to a 
Management Assistance Agreement and an Agency and Distributorship Agreement with FMC.  
SRS’s financial statements are consolidated with those of FMC.   

 
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FACTS 
Background 
 
5. FMC failed to promptly address numerous red flags of corruption in its operations 
that were known since the early 2000s.  This includes employees making improper payments 
through a variety of schemes, including using sham consulting contracts, falsifying documents, and 
funneling bribes through a system of third party intermediaries.  FMC failed to properly assess and 
manage its worldwide risks, and devoted insufficient resources to compliance.  In many instances, 
senior management actively thwarted compliance efforts, personally engaging in corruption 
schemes and directing employees to destroy records of the misconduct.  The improper conduct 
continued for years in Saudi Arabia, Morocco, eight countries in the West African region, Angola, 
Turkey, Spain, China, Serbia, Bosnia, and Mexico. 
 
Conduct Relevant to Saudi Arabia  
 
6. From 2007 to 2012, FMC’s wholly consolidated distributor Saudi Advanced Renal 
Services (“SRS”) paid over $4.9 million in improper payments to publicly-employed doctors 
(“HCPs”), government officials and others in Saudi Arabia to retain or obtain business.  FMC 
knew of the high risks in the business, but failed to ensure that sufficient internal accounting 
controls were in place.  FMC also failed to assign a compliance officer to the region.  In 2009 and 
early 2011, senior officials at FMC’s German headquarters received reports from a senior SRS 
finance officer that the SRS General Manager (“GM”) submitted false invoices and that there was 
a practice of making improper marketing and travel expenditures without proper documentation.  
The conduct continued and by December 2011, the SRS finance officer elevated his complaints to 
the FMC controller and the head of Internal Audit.  The conduct continued until late 2012 when 
remedial action was first initiated and the GM was terminated in 2013.  Overall, FMC benefitted 
by over $40 million as a result of the corruption schemes in Saudi Arabia.         
 
 7. Payments were made to private and public HCPs, other government officials, and 
high ranking officials at a Saudi Technical Organization that was acting in an official capacity 
for or on behalf of the Kingdom of Saudi Arabia when it reviewed and approved dialysis 
products for use in tenders.  Between 2007 and 2012, SRS generated approximately $1.77 
million through a check writing scheme.  Checks were written to SRS employees who cashed the 
checks and handed the cash to the SRS GM.  SRS employees sometimes stored bags of cash in a 
safe without proper documentation.  The transactions were falsely recorded as project marketing 
expenses and collection commissions in SRS’ books and records, which FMC consolidated.  In 
addition to false descriptions, the transactions lacked appropriate support for the accounting 
entries.   
 
8. Through another scheme, SRS entered into a purported collection commission 
agreement with the relative of a MOH employee in connection with bidding on MOH dialysis 
machine tenders. While SRS had salaried employees that collected overdue receivables from FMC 

 
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customers, the MOH relative was paid over $200,000 for work already performed by these 
employees – which was more than the combined total salary paid to these same employees.  As a 
result, FMC won the tender.  
 
9. A variety of other questionable business schemes included:  i) sham consulting 
agreements with doctors for services never performed, ii) payments to third party agents in which 
doctors had beneficial interest, and iii) improper travel, entertainment, and gifts to doctors.  FMC 
failed to conduct due diligence on the doctors and agents, or take steps to ensure that agreed upon 
services were provided. 
 
10. Some specific examples of the methods used by FMC to make illicit payments to 
doctors in Saudi Arabia are as follows:                        
 
 Improper payments to Doctor A, a high-ranking official at Saudi Technical Organization , who according to 
one email, played a critical role in FMC’s factory avoiding an inspection that “could have shut down the 
factory or made it ineligible for tenders.”  FMC payments to Doctor A were made through commission 
agreements with no evidence of services provided.  On at least one occasion, it was communicated to SRS 
and FMC that Doctor A would not sign necessary papers for FMC products because he had not been paid.  
Doctor A received over $220,000.  FMC also employed two of Doctor A’s family members despite 
knowledge that they were low performers in order to keep the doctor happy.   
 
 Doctor B, another high-ranking official of Saudi Technical Organization and who served as a board 
member of a prominent charity founded by the Saudi government as well as a director of a company that 
provided FMC dialyzers to KSA hospitals, received payments pursuant to contracts with entities owned by 
the doctor or consulting contracts in which there was no evidence that services were performed.  Once the 
contracts expired in 2008, SRS continued to make payments through late 2011 despite the lack of services 
rendered.  Doctor B was paid over $190,000.        
 
 Payments were also made to Doctor C, the CEO of a charity established by a senior Saudi Official and an 
organization very influential in determining MOH tender award recipients.  In one email, the GM stated 
that Doctor C had informed SRS that those who “will support the charity will get the [MOH] orders as 
simple as that.”  Doctor C and his family were also provided with travel that had no business purpose.  In 
addition on March 15, 2012, Doctor C, using an internet-based email account, emailed SRS GM a draft 
commission contract for his assistance in securing contracts on behalf of FMC.  Doctor C received over 
$93,000.   
 
 Head Nurse D, for a military hospital, also received cash payments over $213,000 through both the check-
to-cash scheme and payments as a purported consultant with no proof of services rendered.  SRS made 
product sales valued at approximately $1.467 million and won three MOH tenders for the military hospital. 
 
 Improper gifts valued over $330,000 were provided to doctors and customers without adequate supporting 
documentation with the more expensive gifts given to the more influential customers.     
11.  SRS also made at least $31,000 in improper payments to Saudi customs officials 
through a third-party agent to avoid or reduce penalties and fees.  Invoices from the customs agent 
mischaracterized the payments as handling charges or miscellaneous expenses.  SRS accounting 

 
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records show that $1.76 million of additional payments to the customs agent lacked supporting 
documentation of services it rendered.   
 
12.  Numerous documents were altered, destroyed and falsified in the company’s 
accounting records to conceal the bribes.  The falsification and destruction of records intensified 
once the company’s internal investigation began.  For example, employees created fake accounting 
records to support a $100,000 check-to-cash transaction related to a bid for a multi-billion dollar 
MOH tender.  The discovery of the $100,000 payment led FMC to withdraw from the tender.   
       
Conduct Relevant to Morocco 
 
13. From 2006 to 2010, an FMC Senior Officer and FMC Sales Manager in Germany 
engaged in a scheme to pay bribes to a Moroccan Official, the chief nephrologist at two state 
owned military hospitals, to obtain contracts.  They entered into a sham marketing agreement with 
Moroccan Official to pay him a 10% commission on a contract with Agadir Military Hospital with 
half to be paid in 2007 and afterwards 12.5% annually.   They also agreed to pay him bribes on 
future projects in Morocco including Rabat Military Hospital.     
 
14. In order to get $123,000 in cash for the Moroccan Official, they devised a scheme 
in which they paid a fake bonus to a West Africa manager who had a German bank account.  The 
senior FMC Germany managers assisted in backdating the fake bonus payment and amending 
West Africa manager’s employment contract.  West Africa manager then traveled to Germany with 
the brother of Morocco Official to retrieve the cash from his German bank, which he then gave to 
the brother for the Moroccan Official.  Numerous red flags were overlooked in connection with the 
bonus payment, including that the bonus payment order and contract amendment were clearly 
backdated and didn’t have any relevance to the Moroccan business.   
 
15. Less than one month later, in February 2007, FMC Morocco and the Agadir 
Military Hospital entered into a contract to build and provide products for a dialysis center.  From 
2008 through March 2012, FMC paid the Moroccan Official an additional $111,000 that was also 
funneled through fake bonus payments to another FMC manager.  All the bribe payments were 
falsely recorded as commission payments.  FMC earned over $2.3 million in revenue from the 
Agadir hospital project as a result of its bribery scheme.          
 
16. FMC also paid bribes to the Moroccan Official to obtain a 2009 contract at the 
Rabat Military Hospital, this time using a sham consultant contract with a Moroccan agent 
associated with Moroccan Official.  FMC failed to identify numerous red flags of the corruption, 
including the fact that the contract was backdated and the purported invoices and endorsed checks 
from the Moroccan agent were signed by Moroccan Official’s brother, who was also a FMC 
Morocco manager.  Between 2009 and 2010, FMC paid the agent approximately $221,000 
intended for Moroccan Official and falsely recorded as marketing expenses.   
 
17. In April 2012, FMC received a whistleblower email raising various allegations 
about payments to government officials in Morocco.    In May 2013, FMC received an anonymous 

 
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complaint about improper payments related to military hospitals located in Agadir and Rabat.  
Despite the 2012 allegations, and a subsequent email received in July 2013, FMC did not initiate 
an investigation until January 2014, almost eight months later.  After receiving preservation notices 
in January 2014, some FMC managers destroyed records and deleted files from computers.  
Overall, FMC benefited by over $3 million as a result of the corruption schemes in Morocco.      
 
Conduct Relevant to Eight West African Countries 
 
18. From 2007 to at least 2016, the same FMC Senior Officer and FMC Sales Manager 
who orchestrated the bribe schemes in Morocco also engaged in schemes to bribe publicly-
employed hospital doctors and administrators in eight West African countries to win FMC 
business.  The countries include Gabon, Cameroon, Benin, Burkina Faso, Chad, Ivory Coast, 
Niger, and Senegal.   
  
19. In Gabon for example, from October 2007 to 2009, FMC entered into sham 
consultant agreements with three government hospital executives in return for their assistance in 
obtaining business and timely payments from product sales to Centre Hospitalier de Libreville 
(“CHL”), a public hospital.  FMC agreed to pay the executives a kickback from each dialysis kit 
sold to the hospital, paying the executives over $420,000.  The bribe payments were falsely 
recorded as “export commissions.”    
 
20. Beginning in 2009, a third party agent (“West African Supplier”) was used as a 
conduit for the payments.  FMC paid sham “service fees” to West African Supplier, who passed 
the funds to public HCPs and hospital administrators who had previously been paid through fake 
consultancy agreements.  In May 2010, FMC backdated a service agreement with West African 
Supplier to January 1, 2009 to better conceal the scheme.  From 2009 to 2012, FMC paid West 
African Supplier over $807,000 intended for the three Gabonese hospital executives, and over $2.1 
million intended for doctors in other West African countries.   
 
21. In 2013, West African Supplier’s relationship with FMC was changed from a third 
party agent to a purported distributor. Rather than pay West African Supplier a service fee, it was 
provided with a significant margin on sales to the Ministry of Health, CHL, and other West 
African hospitals to fund the payments to HCPs.  Numerous red flags were present that West 
African Supplier was not a true distributor, including the facts that FMC continued to pay for the 
delivery of its products to customers and that products were sold to West African Supplier at a 
greatly reduced price.    
 
22. A FMC Sales Manager raised concerns about FMC’s loss of revenue using West 
African Supplier as a distributor since they were receiving almost 50% less than what had been 
invoiced to the hospitals under the prior scheme.  The FMC finance director for West Africa 
explained the loss of revenue was justified since West African Supplier was absorbing the costs of 
making the phony commission payments to the doctors.  With the costs shifted to West African 
Supplier, FMC books showed expenses were significantly lower, which enabled FMC executives 
to conceal the bribe payments to the hospital officials.  From 2007 to 2016, FMC made improper 

 
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payments in Gabon of approximately $2.3 million either directly to hospital executives or through 
West African Supplier.      
 
23. FMC also used West African Supplier as a distributor to funnel improper 
commission payments to doctors in return for product sales with public hospitals in Benin, Burkina 
Faso, Ivory Coast, Niger, and Senegal.  The conduct started in 2007 and continued through at least 
2016 when FMC finally terminated the relationship.  Throughout the schemes, an FMC West 
Africa manager used his personal internet-based email accounts to send spreadsheets of bribe 
payments to hospital employees to FMC Germany supervisors, who ensured that the improper 
payments were made.   
 
 24. From 2007 through 2012, FMC engaged in a similar bribery scheme in Cameroon, 
but used a different distributor.  For example, FMC gave one hospital official 15% of all hospital 
sales and gave another doctor five euros per dialysis kit sold.  From 2007 to 2016, approximately 
$1.7 million in improper payments to publicly-employed doctors were made from Cameroon 
Distributor’s margin on the resale of the FMC products.   
 
 25. Despite the ongoing investigations of known corruption in multiple nearby 
countries, FMC failed to implement a sufficient system of internal accounting controls.  The 
bribery schemes in West Africa continued by many of the same FMC managers involved in 
schemes in other countries.  The books and records often lacked adequate documentary support 
and records were falsified.  At the direction of more senior FMC managers, employees altered and 
destroyed documents and deleted files from computers.  Efforts were made to align fictitious 
stories about the misuse of company funds and lower-level employees were berated if they didn’t 
destroy their laptops or delete emails.  Despite multiple red flags of bribery, FMC’s legal, 
compliance, and internal audit functions failed to detect and prevent the bribery.  Employees were 
inadequately trained on the company’s anti-corruption policies, and due diligence on third parties 
was minimal.  Overall, FMC benefited by over $40 million as a result of the corruption schemes in 
West African countries. 
 
Conduct Relevant to Angola 
 
 26. In 2004, FMC South Africa explored entering the Angolan dialysis market and 
generated a report, which was circulated to several FMC employees, including FMC EMEA 
Executive Vice President, that raised red flags about corruption, most notably that Angola’s 
Director of Military Services (“Military Official”) received a 20% commission on all dialysis kits 
sold to military hospitals and that Angolan Reseller was partially owned by government officials.  
An August 7, 2007 email also warned of “concerns about this direct market entry . . . . [that] will 
require some extra precaution, documentation, and management attention.” 
   

 
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27. In 2008, FMC Portugal began selling products into Angola through Angolan 
Reseller, which was partly owned by Military Official.  Further, FMC did not adequately train its 
FMC Portugal employees about their dealings with government officials until late 2012.  As a 
result, from 2008 to 2010, bribes were paid in the form of 20% commissions to Military Official 
through Angolan Reseller.  
 
28. In 2008, FMC created FMC Angola, a separate legal entity intended to make sales 
into Angola with FMC Portugal retaining management.  By 2010, FMC’s relationship with its 
reseller became fractured.  In June 2010, FMC Portugal orchestrated a scheme by which it 
provided a 35% stake in FMC Angola to prominent Angolan nephrologists, including Military 
Official, as well as to Angolan Doctor A, a key nephrologist at several Angolan public hospitals 
that were state-owned entities.  In April 2011, FMC granted a power of attorney to execute the 
share transfer, signed by FMC’s senior legal and compliance officer and an FMC Board of 
Management member.  In January 2012, the shares were transferred to the Angolan officials 
without their having paid anything in exchange and without any due diligence conducted on the 
transaction.    
 
29. FMC Angola also entered into a business relationship with Angolan Distributor, 
owned equally by the sons of Military Officer.  First, FMC Angola paid Angolan Distributor 
$559,972 for “temporary storage” services without a contract or actual services performed.  FMC 
Angola also entered into a contract with Angolan Distributor for “the Provision of Logistics 
Services” whereby Angolan Distributor was to provide warehousing storage for $77,300 per 
month, which it received despite never providing the warehousing.  FMC Angola in fact already 
had a lease agreement with another warehouse for the same services at a cost three times less than 
the costs charged by Angolan Distributor.   
 
30. In June 2012, a draft internal audit report identified that in Angola “overall controls 
are not functioning as intended” and flagged the Angolan Distributor temporary storage 
arrangement as a problem since (1) the owner of the company was a shareholder of FMC Angola 
and (2) there was a total lack of written documentation relating to the services.  FMC Legal and 
Compliance issued a directive in October 2012 freezing all payments to Angolan Distributor.  
Despite the directive, FMC Angola continued to accrue an additional $878,900 on its books for 
storage services never rendered, but ultimately was prevented from making the payment.   
 
31. During the freeze period, in addition to the temporary storage contract with 
Angolan Distributor, FMC made Angolan Distributor its exclusive distributor in Angola of certain 
products and gave Angolan Distributor one of FMC’s largest clients as a customer.  The distributor 
arrangement thereby created a significant margin, approximately 60% of sales, that was provided 
to the government officials on over $433,000 in sales.   
 
32. FMC’s senior managers both in Portugal and at the parent level failed to take any 
timely steps to put a stop to the numerous conflicts raised by the Angolan Distributor relationship.  
FMC Portugal misled FMC’s internal audit team when they tried to determine if additional 
relationships with the Angolan Distributor existed.  Only upon being instructed in July 2013 to 

 
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“Please freeze the contract” did a senior FMC Portugal manager report that Angolan Distributor 
had been made a distributor for certain sales without any written contract.     
 
33. Despite this new information, it took until November 2013 for an FMC Legal and 
Compliance team to review the relationship with Military Officer and the other minority 
shareholders, including examining “the applicability and justification of dividends for shareholders 
who have not paid for their interest in the company yet.”  FMC Legal and Compliance ultimately 
concluded in December 2013 that these facts raised “a serious issue under our company’s 
government procedures and a problematic behavior . . . . it cannot be questioned that a clear 
management board directive” was not followed.  
 
 34. During the entire time, FMC Angola also made payments to the other minority 
shareholders, Angolan Doctor A and Angolan Doctor B, both government officials, by entering 
into consulting contracts with each doctor.  Per contracts, Angolan Doctor A was paid $7,500 per 
month while Angolan Doctor B was paid $3,140 monthly.  Angolan Doctor A discussed his 
consultancy payments with FMC using his personal internet-based email account.  Pursuant to 
these contracts and other salary payments, the doctors received a total of approximately $400,000 
from FMC.  There was no review of the contracts, no apparent due diligence for conflicts of 
interest, and no documentation of services.  Overall, FMC benefited by over $10 million as a result 
of the corruption schemes in Angola. 
 
Conduct Relevant to Turkey  
 
35. Between 2005 and 2014, FMC Turkey entered into four separate joint ventures with 
publicly employed doctors in exchange for those doctors directing business from their public 
employer to FMC clinics.  The doctors did not provide any capital in exchange for their shares.  In 
some cases, doctors’ shares were held in the names of other individuals.  
 
36. In a 2007 internal presentation by a FMC Turkey Vice-President, FMC Turkey set 
forth a strategy to “select and find ways to work with nephrologists who refer the patients from the 
important state hospitals.” The presentation included a proposal to pay salaries and bonuses to 
doctors and provide them with 20-30% shares in joint ventures in exchange for the doctors 
directing patients to FMC Turkey clinics.   
 
37. In one joint venture involving a prominent doctor at a public hospital in Diyarbakir, 
a senior manager at FMC Germany wrote: “The professor who is our shareholder has very strong 
relations with all state authorities including the university and other state hospitals.  He is in a way 
protector of our interests, benefits and operation in the city....  It is very hard to compete and 
operate in this city if a powerful local is not backing you....  He should stay as our doctor for the 
health and wellbeing of our system in this city.” 
 
38. After recapitalizing the JV, FMC paid that same doctor over $350,000 for his 
unpaid interest in the JV, a payment that was based in part on patient enrollment.  Then in 2013, 
FMC Turkey sold the clinic’s assets to the doctor for $830,000.  The FMC AG Board of 

 
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Management approved the sale to the doctor in June 2013.  As early as at least 2008, FMC senior 
management were aware that the doctor did not pay for his initial 35% stake in the clinic, and that 
his shares were being held in someone else’s name.     
 
39. In Erzurum, FMC gave shares to a professor with ties to the Turkish Minister of 
Health, for referring patients from the university’s clinics.  The professor didn’t make any capital 
contributions for his shares.  Ultimately, the professor was paid $323,000 for his 40% stake despite 
having an outstanding $1,553,000 receivable.  FMC Turkey managers discussed the need to make 
the payment to the professor despite the outstanding receivable.  In one exchange among FMC 
managers, they noted that if they pushed for payment the “[Professor] would immediately turn his 
back to us and fight with us.  Knowing his before mentioned local and country level power, ... he 
would ask the doctors to refer back their patients to state hospital clinic and would also ask the 
doctors to change to [a FMC competitor] all our PD patients.”   
 
40. In one JV that should have raised significant red flags, the approval request to the 
FMC Board of Management stated that three doctors “currently working in the dialysis unit of the 
State Hospital will participate in the startup both as shareholders and employees.  It is expected that 
on opening 60 patients will be referred from the State Hospital to the new clinic.” An email among 
FMC Turkey senior management noted “Our expectations regarding [Yalova] are high as we have 
very powerful doctors as partners in these startups.  So after a year’s time we expect high patient 
numbers and at least breakeven results in two years and a profitable operation after then.”  None of 
the doctors contributed capital for their shares.      
 
41. In another example, in Kayseri, FMC Turkey entered into a joint venture with a 
nephrologist at the state hospital, noting “After 2 years, when the patient number increases preset 
levels, [the doctor] will sell their shares at preset amounts and their debt to the company will be 
deducted from this amount and the rest will be paid to them.”  In August 2012, FMC Turkey 
entered into a share purchase agreement to purchase the doctor’s 20% interest, which provided for 
a purchase price predicated on the number of patients at the clinic.  Between 2012 and 2013, the 
doctor received $63,000.  In 2014, he received $451,000 in cash and debt reductions, including 
debts unrelated to the transaction, for his 20% stake.  The payment was based principally on the 
number of patients enrolled at the clinic at the time of the sale.  Overall, FMC benefited by over $1 
million as a result of the improper conduct in Turkey.       
 
Conduct Relevant to Spain 
 
42. In certain public tenders between 2007 and 2014, FMC Spain received advance 
information about tender specifications from publicly employed doctors or administrators.  Some 
of those doctors received improper payments from FMC Spain, including pursuant to consulting 
agreements, or other benefits such as travel to medical congresses, trips to the United States, 
donations to fund projects for the doctors, and gifts.  In some of these tenders, FMC Spain sought 
to have the doctors modify aspects of the tenders before the tenders were publicly announced or to 
direct hospital sales to FMC.       
 

 
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43. FMC Spain entered into numerous consulting agreements with publicly employed 
doctors with limited or no due diligence or compliance review.  FMC Spain failed to adequately 
document services performed by doctors who also assisted in obtaining or retaining business.  Per 
the agreements, fixed amounts to be paid to the doctors as “consultants” ranged from $16,000 to 
approximately $187,000 per year.  Sometimes payments were made without a written agreement.   
 
44. For example, in connection with a 2011 tender held by a Valencia state-owned 
hospital, FMC Spain provided Spain Doctor A with draft tender technical specifications and 
improvements, a draft scoring methodology, and proposed scores to win the tender.  The doctor 
used his personal email account to agree to some of the proposals with FMC winning the $2 
million tender.  FMC Spain paid Spain Doctor A over $114,000 between 2008 and 2011.  A 
donation of over $40,000 was made to the hospital’s foundation for the doctor’s training programs, 
and additional payments were made to the doctor between 2012 and 2014 of $51,600, along travel 
sponsorships and gifts.   
 
45. According to a December 2014 email between senior FMC managers discussing 
influencing a 2015 tender at a state-owned hospital in Torrecardenas, the company “got [Spain 
Doctor B] to decide to support [FMC Spain] to obtain 60% of the adjudication.”  Afterward, FMC 
won 60% of the tender, valued at approximately $3 million.  Spain Doctor B received payments 
from FMC, as well as travel sponsorships and gifts.   
 
46. In some instances, FMC Spain made improper payments to doctors to refer patients 
to FMC clinics or to use more expensive FMC products.  Payments were sometimes made to the 
doctors indirectly through consortiums owned by the doctors, or by FMC acquiring businesses 
from the doctors and, thereafter, paying for the use of the buildings in which the businesses were 
located. 
 
47. For example, FMC Spain made improper payments and provided benefits to six 
publicly-employed doctors at a Spanish state-owned hospital.  FMC Spain acquired a clinic owned 
by the doctors and then paid them 5% of all subsequent sales, and then later leased space from the 
doctors.  FMC Spain provided additional compensation to the six doctors by entering into a 
consulting agreement with various forms of businesses owned by the doctors.  In total, FMC paid 
the doctors over $3 million.   
 
48. In 2010, FMC’s Internal Audit team found FMC Spain failed to comply with the 
company’s policy concerning dealings with foreign officials.  In 2014, another Internal Audit 
report, sent to the same recipients as the 2010 report and the entire FMC Management Board, 
raised significant red flags about FMC Spain’s payments to public officials, including a lack of 
documentation for payments related to gifts, donations, sponsorships, commissions, and 
consultancy payments.  The payments to doctors continued until 2015.  Many of these payments 
were improperly recorded as consulting expenses in the books and records of FMC and FMC 
Spain.  Overall, FMC benefited by over $20 million as a result of the improper conduct. 
 

 
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Conduct Relevant to China 
 
49. From 2007 to 2014, FMC China’s clinic business, Nephrocare, planned and 
implemented incentive programs in which bonus payments were provided to publicly-employed 
HCPs with which FMC China had supply agreements.  The amounts of the payments were based 
in part on the number of treatments provided and/or the number of new patients treated, and were 
taken into consideration in the clinics’ financial models.  Certain emails between FMC China 
personnel suggest that the purpose of the bonus payments was to influence clinic procurement 
decisions. 
 
50. During this time period, approximately $6.4 million in expense accrual entries were 
related to such bonuses.  However, only $1.7 million of the $6.4 million were reconciled to specific 
payments.  Of the remaining $4.7 million in accruals, the FMC China accounting records failed to 
adequately tie the accruals and payments.  They were recorded either in the year-end bonus or 
other promotional expenses general ledger accounts, and were generally described in underlying 
accounting records as “center marketing fees.”  The inaccurate record-keeping can be attributed to 
a senior FMC China manager, who cautioned a fellow employee in 2011 to avoid the use of the 
term bonus due to “internal legal compliance” concerns when describing these payments.   
 
51. As a general practice, these bonuses would be paid once FMC China received 
payments it was owed from hospitals for equipment purchases.  Payments were made directly to 
the doctors and nurses responsible for managing the clinics and in positions to influence clinic 
procurement decisions.  Some payments were made in cash, while others were made by wire 
transfer, and later by a third party agent.  FMC China stopped using the third party agent in 2014 
after an internal audit report raised concerns that the agent was being paid without corresponding 
reports showing proof of services rendered.  Overall, FMC benefited by over $10 million as a 
result of the improper conduct. 
 
Conduct Relevant to the Balkan Region (Serbia and Bosnia) 
 
52. From 2007 to 2014, four doctors were paid over $329,000 by FMC while serving 
on the Serbian Health Fund (“RFZO”) commission or other public tender commission while FMC 
sought business from those same public commissions.  FMC also paid for side trips and extra day 
accommodations for publicly-employed doctors in connection with travel to medical conferences.  
For example in 2008, FMC paid $393,000 for travel and accommodations for those same four 
dual-employed doctors and their spouses to attend a conference in Philadelphia, PA, which 
included non-business side trips to New York City and Cancun, Mexico.  Doctors were also 
provided laptops and GPS devices.       
 
53. FMC paid dual-employed doctors through a Serbian Agent.  In 2010, FMC 
compliance issued a directive prohibiting the use of Serbian Agent and requiring that service 
contracts have more specificity to support payments.  The directive was circumvented when an 
FMC Serbia executive approved payments through a third-party transport vendor, who then paid 
over $170,000 to the dual-employed doctors.    FMC also made over $1 million in payments to 

 
 13 
“speed up” the clinic privatization process for four clinics. The consultant’s quarterly reports used 
to support the payments were drafted by FMC senior managers.  In another instance, FMC senior 
managers gave a distributor, operated by a Serbian doctor, cash payments of over $62,000 plus 10 
dialysis machines free of charge, which he resold to FMC for $139,500 to prolong a tender silently 
and avoid import taxes.   
 
54. In Bosnia, FMC also made improper payments to a prominent Bosnian government 
doctor to support FMC’s bid to win a government tender to establish and operate clinics in the 
regions of Srpska and Brcko.  In November 2008, the doctor was elected to the Brcko Assembly.  
A 2008 fourth quarter activity report from the doctor to FMC listed as an achievement for the 
quarter “removing all problems regarding the tender in Brcko.”  FMC initially failed to investigate 
the meaning of that entry and instead paid the doctor $80,850 in December 2008.  In February 
2009, the doctor was elected the mayor of Brcko and thereafter the consultant agreement was 
placed in the name of the doctor’s wife.  By 2009, FMC paid the doctor over $1.3 million to 
successfully win the bid.  FMC also made over $957,000 in payments to a Bosnian healthcare 
executive to assist FMC’s establishment of clinics in Brcko and Hercegovina, without any 
evidence of services performed.  Overall, FMC benefited by over $10 million as a result of the 
improper conduct in Serbia and Bosnia.         
               
Conduct Relevant to Mexico 
 
 55. In 2010, FMC Mexico engaged in a scheme to increase the price per dialysis kit for 
a tender with one of its largest customers in Mexico, Instituto Mexicano del Seguro Social 
(“IMSS”), Mexico’s state-run social insurance agency.  FMC Mexico employed the services of a 
third party agent, Mexican Distributor, to pay kickbacks to IMSS officials relating to the tender 
bid.  Among other products, Mexican Distributor sold medical kits used in hemodialysis 
treatments.   
 
 56. In January 2010, FMC Mexico was awarded a portion of an IMSS subrogation 
tender, at an agreed reimbursement price of $92 per treatment, which reflected a price increase that 
Mexican Distributor supposedly negotiated for its kits.  On December 8, 2010, almost a full year 
after the IMSS tender award, FMC Mexico’s General Director and Chief Financial Officer 
executed a contract with Mexican Distributor, agreeing to pay Mexican Distributor a commission 
of $0.40 per treatment performed on IMSS patients in 2010 and $0.20 per treatment in 2011.  The 
retroactive contract improperly identified the commissions as being for “advice.”   
 
57. An FMC internal audit report found several problems with this arrangement, 
including insufficient evidence that Mexican Distributor rendered services that contributed to the 
increase in price, the contract was signed a year after services were supposedly rendered, and 
monetary payments were made retroactively.  The audit identified $213,500 in improper 
commissions paid to Mexican Distributor intended in part for IMSS officials in 2010 and 2011. 
Overall, FMC benefited by over $2 million as a result of the improper conduct.  
   

 
 14 
Legal Standards and Violations 
58. Under Section 21C of the Exchange Act, the Commission may impose a cease-and-
desist order upon any person who is violating, has violated, or is about to violate any provision of 
the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, or 
would be a cause of the violation, due to an act or omission the person knew or should have known 
would contribute to such violation. 
59.  As a result of conduct described above in Saudi Arabia, Angola and West Africa,  
FMC violated Section 30A of the Exchange Act, which in relevant part makes it unlawful for an 
issuer with securities registered under Section 12 of the Exchange Act or which is required to file 
reports under Section 15(d) of the Exchange Act, or any employee or agent acting on its behalf, to 
make use of the mails or any means or instrumentality of interstate commerce corruptly in 
furtherance of an effort to pay or offer to pay anything of value to foreign officials for the purpose 
of influencing their official decision-making, in order to assist in obtaining or retaining business.  
Finally, each FMC subsidiary and entity was also an “agent” of FMC within the meaning of the 
Foreign Corrupt Practices Act. 
 
60. Further, as a result of the conduct described in each of the countries above, FMC 
violated Section 13(b)(2)(A) of the Exchange Act, which requires issuers to make and keep books, 
records, and accounts which, in reasonable detail, accurately and fairly reflect their transactions 
and dispositions of the assets of the issuer.  
 61. In addition, as a result of the conduct described in each of the countries above, 
FMC violated Section 13(b)(2)(B) of the Exchange Act, which requires issuers to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable assurances that 
(i) transactions are executed in accordance with management’s general or specific authorization; (ii) 
transactions are recorded as necessary (I) to permit preparation of financial statements in conformity 
with generally accepted accounting principles or any other criteria applicable to such statements, 
and (II) to maintain accountability for assets; (iii) access to assets is permitted only in accordance 
with management’s general or specific authorization; and (iv) the recorded accountability for assets 
is compared with the existing assets at reasonable intervals and appropriate action is taken with 
respect to any differences.   
 
FMC’s Self-Disclosure, Cooperation, and Remedial Efforts 
 
62. In determining to accept the Offer, the Commission considered remedial acts 
promptly undertaken by Respondent and cooperation afforded the Commission staff.  FMC self-
reported certain misconduct and voluntarily provided facts developed during its internal 
investigation.  FMC’s cooperation with the Commission’s investigation varied at times.  FMC 
produced documents, including key document binders and translations as needed, and made 
current or former employees available to the Commission staff, including those who needed to 
travel to the United States.  
 

 
 15 
63. FMC’s remediation included the termination of employees and third parties 
responsible for the misconduct and enhancements to its internal accounting controls.  FMC 
strengthened its global compliance organization; enhanced its policies and procedures regarding 
the due diligence process and the use of third parties; created positions to address potential risks; 
and increased training of employees on anti-bribery issues. 
 
Undertakings 
 
 64. Respondent undertakes to engage an Independent Compliance Monitor and report 
to the Commission staff periodically pursuant to the provisions set forth in Attachment A of the 
Order.  
  
 65. Respondent undertakes to require the Independent Compliance Monitor to enter 
into an agreement that provides that for the period of engagement and for a period of two years 
from completion of the engagement, the Independent Compliance Monitor shall not enter into any 
employment, consultant, attorney-client, auditing or other professional relationship with 
Respondent, or any of its present or former affiliates, directors, officers, employees, or agents 
acting in their capacity.  The agreement will also provide that the Independent Compliance 
Monitor will require that any firm with which he/she is affiliated or of which he/she is a member, 
and any person engaged to assist the Independent Compliance Monitor in performance of his/her 
duties under this Order shall not, without prior written consent of the Division of Enforcement, 
enter into any employment, consultant, attorney-client, auditing or other professional relationship 
with Respondent, or any of its present or former affiliates, directors, officers, employees, or agents 
acting in their capacity as such for the period of the engagement and for a period of two years after 
the engagement. 
 
 66. Certify, in writing, compliance with the undertaking(s) set forth above.  The 
certification shall identify the undertaking(s), provide written evidence of compliance in the form 
of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  The 
Commission staff may make reasonable requests for further evidence of compliance, and 
Respondent agrees to provide such evidence.  The certification and supporting material shall be 
submitted to Tracy L. Price, Deputy Chief, FCPA Unit, Division of Enforcement, U.S. Securities 
and Exchange Commission, 100 F Street, N.E., Mail Stop 5631, Washington, D.C. 20549, with a 
copy to the Office of Chief Counsel of the Enforcement Division, no later than sixty (60) days 
from the date of the completion of the undertakings.    
 
 67. Respondent undertakes to do the following:  in connection with this action and any 
related judicial or administrative proceeding or investigation commenced by the Commission or to 
which the Commission is a party, Respondent (i) agrees to appear and be interviewed by 
Commission staff at such times and places as the staff requests upon reasonable notice; (ii) will 
accept service by mail or facsimile transmission of notices or subpoenas issued by the Commission 
for documents or testimony at depositions, hearings, or trials, or in connection with any related 
investigation by Commission staff; (iii) appoints Respondent's undersigned attorney as agent to 
receive service of such notices and subpoenas; (iv) with respect to such notices and subpoenas, 

 
 16 
waives the territorial limits on service contained in Rule 45 of the Federal Rules of Civil Procedure 
and any applicable local rules, provided that the party requesting the testimony reimburses 
Respondent's travel, lodging, and subsistence expenses at the then-prevailing U.S. Government per 
diem rates; and (v) consents to personal jurisdiction over Respondent in any United States District 
Court for purposes of enforcing any such subpoena. 
  
Non-Prosecution Agreement 
 
 68. FMC has entered into a three-year non-prosecution agreement with the United 
States Department of Justice that acknowledges responsibility for criminal conduct relating to 
certain findings in the Order.   
 
Non-Imposition of a Civil Penalty 
 
69. FMC acknowledges that the Commission is not imposing a civil penalty based  
upon the imposition of an $84.7 million criminal fine as part of its resolution with the Department 
of Justice.   
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent FMC’s Offer. 
 
 Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that: 
 
 A. Respondent FMC cease-and-desist from committing or causing any violations and 
any future violations of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B)  of the Exchange Act [15 U.S.C. 
§§ 78m(b)(2)(A), 78m(b)(2)(B), and 78dd-1]. 
 
 B. Respondent shall comply with its Undertakings as enumerated in paragraphs 64 to 
67 above.  
 
 C. Respondent shall, within fourteen days of the entry of this Order, pay disgorgement 
of $135 million and prejudgment interest of $12 million, for total payment of $147 million to the 
Securities and Exchange Commission for transfer to the general fund of the United States Treasury, 
subject to Exchange Act Section 21F(g)(3).  If payment of disgorgement and prejudgment interest is 
not made by the date the payment is required by this Order, additional interest shall accrue pursuant 
to SEC Rule of Practice 600.   
 
Payment must be made in one of the following ways:    
 
(1) Respondent may transmit payment electronically to the Commission, which will 
provide detailed ACH transfer/Fedwire instructions upon request; 
 

 
 17 
(2) Respondent may make direct payment from a bank account via Pay.gov through the 
SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United States 
postal money order, made payable to the Securities and Exchange Commission and 
hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
 Payments by check or money order must be accompanied by a cover letter identifying 
FMC as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 
cover letter and check or money order must be sent to Tracy L. Price, Deputy Chief, FCPA Unit, 
Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 
20549-5631. 
 
D. Respondent acknowledges that the Commission is not imposing a civil penalty 
based in part upon its cooperation in a Commission investigation and related enforcement action.  
If at any time following the entry of the Order, the Division of Enforcement (“Division”) obtains 
information indicating that Respondent knowingly provided materially false or misleading 
information or materials to the Commission, or in a related proceeding, the Division may, at its 
sole discretion and with prior notice to the Respondent, petition the Commission to reopen this 
matter and seek an order directing that the Respondent pay an additional civil penalty.  
Respondent may contest by way of defense in any resulting administrative proceeding whether it 
knowingly provided materially false or misleading information, but may not:  (1) contest the 
findings in the Order; or (2) assert any defense to liability or remedy, including, but not limited 
to, any statute of limitations defense. 
 
 By the Commission. 
 
 
 
       Vanessa A. Countryman 
       Acting Secretary 
 
 
 
 
 
 
 

 
 18 
Attachment A 
Independent Compliance Monitor 
Retention of Monitor and Term of Engagement 
 1. Fresenius Medical Care AG & Co. KGaA (“Company”) shall engage an 
independent compliance monitor (the “Monitor”) not unacceptable to the staff of the Commission 
within sixty (60) calendar days of the issuance of the Order.  The Monitor shall have, at a 
minimum, the following qualifications: (i) demonstrated expertise with respect to the FCPA and 
other applicable anti-corruption laws, including experience counseling on FCPA issues; (ii) 
experience designing or reviewing corporate compliance policies, procedures, and internal 
accounting controls, including FCPA and anti-corruption policies and procedures; (iii) the ability 
to access and deploy resources as necessary to discharge the Monitor’s duties; and (iv) sufficient 
independence from the Company to ensure effective and impartial performance of the Monitor’s 
duties.  The Commission staff may extend the Company’s time period to retain the Monitor, in its 
sole discretion.  If the Monitor resigns or is otherwise unable to fulfill the obligations herein, the 
Company shall within thirty (30) days retain a successor Monitor that has the same minimum 
qualifications as the original monitor and that is not unacceptable to the Commission staff.   
 2. The Company shall retain the Monitor for a period of not less than twenty-four 
(24) months from the date the Monitor is retained (the “Term of the Monitorship”), unless the 
Commission  staff  finds,  in  its  sole  discretion,  that  there  exists  a  change  in circumstances 
sufficient to terminate the Monitorship early or extend the Monitorship as set forth in paragraphs 
24-25 (Termination or Extension of Monitorship).   

 
 19 
Company’s Obligations 
 3. The Company shall cooperate fully with the Monitor and provide the Monitor with 
access to all non-privileged information, documents, books, records, facilities, and personnel as 
reasonably requested by the Monitor, which fall within the Monitor’s mandate; such access shall 
be provided consistent with the Company’s and the Monitor’s obligations under applicable local 
laws and regulations, including but not limited to, applicable data privacy and national security 
laws and regulations.  The Company shall use its best efforts, to the extent reasonably requested, to 
provide the Monitor with access to the Company’s former employees, third party vendors, agents, 
and consultants.  The Company does not intend to waive the protection of the attorney work 
product doctrine, attorney-client privilege, or any other privilege applicable as to third parties. 
 4. The parties agree that no attorney-client relationship shall be formed between the 
Company and the Monitor.  In the event that the Company seeks to withhold from the Monitor 
access to information, documents, books, records, facilities, current or former personnel of the 
Company, its third-party vendors, agents, or consultants that may be subject to a claim of attorney-
client privilege or to the attorney work-product doctrine, or where the Company reasonably 
believes production would otherwise be inconsistent with the applicable law, the Company shall 
work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If, 
during the Term of the Monitorship, the Monitor believes that the Company is unreasonably 
withholding access on the basis of a claim of attorney-client privilege, attorney work-product 
doctrine, or other asserted applicable law, and cannot resolve the matter cooperatively with the 
Company, the Monitor shall notify the Commission staff. 

 
 20 
 5. Upon entry of this Order and during the Term of the Monitorship, should the 
Company learn of credible evidence or allegations of corrupt payments, false books, records, or 
accounts, or the failure to implement adequate internal accounting controls, the Company shall 
promptly report such credible evidence or allegations to the Commission staff.  Any disclosure by 
the Company to the Monitor concerning credible evidence of corrupt payments, false books and 
records, or internal accounting control issues shall not relieve the Company of any otherwise 
applicable obligation to truthfully disclose such matters to the Commission staff.   
Monitor’s Mandate 
 6. The Monitor shall review and evaluate the effectiveness of the Company’s policies, 
procedures, practices, internal accounting controls, recordkeeping, SOX controls, and financial 
reporting processes (collectively, “Policies and Procedures”), as they relate to the Company’s 
current and ongoing compliance with the anti-bribery, books and records, and internal accounting 
controls provisions of the FCPA and other applicable anti-corruption laws (collectively, “Anti-
corruption Laws”), and make recommendations reasonably designed to improve the effectiveness 
of the Company’s Policies and Procedures and FCPA corporate compliance program (the 
“Mandate”).  This Mandate shall include an assessment of the Management and Supervisory 
Boards and senior management’s commitment to, and effective implementation of, the Policies and 
Procedures and FCPA corporate compliance program.  In carrying out the Mandate, to the extent 
appropriate under the circumstances, the Monitor may coordinate with the Company personnel, 
including in-house counsel or through designated outside counsel, compliance personnel, and 
internal auditors.   To the extent the Monitor deems appropriate, it may rely on the Company’s 
processes, and on sampling and testing methodologies.  The Monitor is not expected to conduct a 

 
 21 
comprehensive review of all business lines, all business activities, and all markets.  This Mandate 
shall not apply to Fresenius Medical Care Holdings, Inc. and its subsidiaries, to the extent that 
those entities and/or their employees and agents operate exclusively within the United States.  
Nonetheless, the Monitor may seek a briefing on the regulatory environment and the structure of 
the compliance program in the United States.  If requested by the Monitor, the Company shall 
provide such a briefing, with reasonable consideration of the scope of the Mandate.  Any disputes 
between the Company and the Monitor with respect to the Work Plan shall be decided by the 
Commission staff in its sole discretion. 
 7.   During the Term of the Monitorship, the Monitor shall conduct an initial review 
and two follow-up reviews and prepare an initial report and a first and second follow-up report, 
and issue a Certification Report if appropriate, as described below. 
Initial Review and Report 
 8. Promptly upon being retained, the Monitor shall prepare a written Work Plan, 
which shall be submitted to the Company and the Commission staff for comment no later than 
thirty (30) days after being retained. 
9. In order to conduct an effective Initial Review and to understand fully any existing 
deficiencies in the Company’s Policies and Procedures and FCPA corporate compliance program, 
the Monitor’s Work Plan shall include such steps as are reasonably necessary to understand the 
Company’s business and its global anti-corruption risks.  The steps shall include: 
(a) inspection of relevant documents, including the internal accounting 
controls, recordkeeping, and financial reporting policies and procedures as 
they relate to the Company’s compliance with the books and records, 

 
 22 
internal accounting controls, and anti-bribery provisions of the FCPA and 
other applicable anti-corruption laws; 
(b) onsite observation of selected systems and procedures comprising the 
Company’s Policies and Procedures and FCPA corporate compliance 
program, including anti-corruption compliance procedures, internal 
accounting controls, recordkeeping, due diligence, and internal audit 
procedures, including at sample sites; 
(c) meetings  with, and  interviews  of,  as relevant, the  Company employees, 
officers,  directors,  and,  where  appropriate  and  feasible,  its  third-party 
vendors, agents,  or consultants and  other persons at  mutually convenient 
times and places; and 
(d) risk-based analyses, studies, and testing of the Company’s FCPA 
corporate compliance program. 
10. The Monitor may take steps as reasonably necessary to develop an understanding 
of the facts and circumstances surrounding prior FCPA violations that gave rise to this action 
or violations of other applicable Anti-corruption Laws, but shall not conduct his or her own 
inquiry into those historical events. 
11. After receiving the Initial Review Work Plan, the Company and Commission staff 
shall provide any comments concerning the Initial Review Work Plan within fifteen (15) days to 
the Monitor.  Any disputes between the Company and the Monitor with respect to the Initial 
Review Work Plan shall be decided by the Commission staff in its sole discretion.  Following 

 
 23 
comments by the Company and Commission staff, the Monitor will have ten (10) days to submit a 
Final Initial Review Work Plan. 
12. The Initial Review shall commence no later than sixty (60) days from the date of 
the engagement of the Monitor (unless otherwise agreed by the Company, the Monitor, and the 
Commission staff).  The Monitor shall issue a written report within one hundred twenty (120) days 
of commencing the Initial Review, setting forth the Monitor’s assessment and, if necessary, 
making recommendations reasonably designed to improve the effectiveness of the Company’s 
Policies and Procedures and FCPA corporate compliance program as they relate to the Company’s 
compliance with the FCPA and other applicable Anti-corruption Laws.  The Monitor should 
consult with the Company concerning his or her findings and recommendations on an ongoing 
basis and should consider the Company’s comments and input to the extent the Monitor deems 
appropriate.  The Monitor may also choose to share a draft of his or her report with the Company 
and Commission staff prior to finalizing it.  The Monitor shall provide the report to the 
Management Board of the Company and contemporaneously transmit a copy to Commission staff. 
13. Within ninety (90) days after receiving the Monitor’s Initial Review Report, the 
Company shall adopt and implement all recommendations in the report, provided, however, that as 
to any recommendation that the Company considers unduly burdensome, impractical, costly, or 
inconsistent with applicable law or regulation, the Company need not adopt that recommendation 
at that time, but may submit in writing to the Monitor and the Commission staff within fifteen (15) 
days of receiving the report, an alternative policy, procedure, or system designed to achieve the 
same objective or purpose. 

 
 24 
14. In the event the Company and the Monitor are unable to agree on an acceptable 
alternative proposal, the Company shall promptly consult with the Commission staff.  Any 
disputes between the Company and the Monitor with respect to the recommendations shall be 
decided by the Commission staff in its sole discretion.  The Commission staff shall consider the 
Monitor’s recommendation and the Company’s reasons for not adopting the recommendation in 
determining whether the Company has fully complied with its obligations.  Pending such 
determination, the Company shall not be required to implement any contested recommendation(s). 
15. With respect to any recommendation that the Monitor determines cannot 
reasonably be implemented within ninety (90) days after receiving the report, the Monitor may 
extend the time period for implementation with prior written approval of the Commission staff. 
Follow Up Reviews 
16. The Monitor shall conduct a minimum of two Follow-Up Reviews. The Monitor 
shall submit a written work plan for each follow-up review to the Company and Commission 
staff within sixty (60) calendar days after the issuance of either the initial report, or the 
applicable follow-up report. The Company and Commission staff shall provide any comments 
concerning the work plan within fifteen (15) calendar days in writing to the Monitor. Any 
disputes between the Company and the Monitor with respect to the written work plan shall be 
decided by the Commission staff in its sole discretion. Following comments by the Company 
and Commission staff, the Monitor will have ten (10) calendar days to make revisions to the 
follow-up work plan. 
17. The Monitor shall commence the follow-up review pursuant to the work plan no 
later than ninety (90) calendar days after the issuance of the initial report, or applicable follow-up 

 
 25 
report, (unless otherwise agreed by the Company, the Monitor and the Commission staff). The 
Monitor shall issue its written follow-up report within one hundred-twenty (120) calendar days 
of commencing the follow-up review. The follow-up report shall set forth the Monitor’s 
assessment of, and any additional recommendations regarding, the Policies and Procedures as 
they relate to the Company’s compliance with the Anti-corruption Laws; the Monitor’s 
assessment of the implementation by the Company of any recommendations made in the initial 
report, or follow-up report if applicable; and the Monitor’s assessment of the commitment of the 
Company’s Supervisory and Management Boards and senior management to compliance with 
the FCPA. 
18. Within ninety (90) days after receiving the Monitor’s follow up report, the 
Company shall adopt and implement all recommendations in the report, provided, however, that as 
to any recommendation that the Company considers unduly burdensome, impractical, costly, or 
inconsistent with applicable law or regulation, the Company need not adopt that recommendation 
at that time, but may submit in writing to the Monitor and the Commission staff within fifteen (15) 
days of receiving the report, an alternative policy, procedure, or system designed to achieve the 
same objective or purpose. 
19. In the event the Company and the Monitor are unable to agree on an acceptable 
alternative proposal within fifteen (15) days, the Company shall promptly consult with the 
Commission staff.  Any disputes between the Company and the Monitor with respect to the 
recommendations shall be decided by the Commission staff in its sole discretion.  The 
Commission staff shall consider the Monitor’s recommendation and the Company’s reasons for 
not adopting the recommendation in determining whether the Company has fully complied with 

 
 26 
its obligations.  Pending such determination, the Company shall not be required to implement any 
contested recommendation(s).  The Monitor shall repeat the process of Follow-Up Reviews 
until the terms in paragraph 21 (Certification of Compliance) or paragraphs 24-25 (Termination 
 
or Extension of Monitorship) are met. 
 
20. Throughout the Term of the Monitorship, the Monitor shall disclose to the 
Commission staff any credible evidence that corrupt or otherwise suspicious transactions 
occurred, or payments of things of value were offered, promised, made or authorized by any 
entity or person within the Company, or any entity or person working directly or indirectly for or 
on behalf of the Company, or that related false books and records may have been maintained by 
or on behalf of the Company. The Monitor shall contemporaneously notify the Company’s 
Global General Counsel, Chief Compliance Officer, or Audit Committee for further action unless 
at the Monitor’s discretion he or she believes disclosure to the Company would be inappropriate 
under the circumstances. The Monitor shall address in his or her reports the appropriateness of 
the Company’s response to all improper activities, whether previously disclosed to the 
Commission staff or not. 
Certification of Compliance 
 
21.   At the conclusion of the ninety (90) calendar day period following the issuance of 
the second follow-up report, or later follow-up report if applicable, if the Monitor believes that 
the Company’s Policies and Procedures and FCPA compliance program are reasonably designed 
and implemented to detect and prevent violations of the Anti-corruption Laws and are 
functioning effectively, the Monitor shall certify the Company’s compliance with its compliance 
obligations under the Order. The Monitor shall then submit to the Commission staff a written 

 
 27 
report (“Certification Report”) within forty (40) calendar days. The Certification Report shall set 
forth an overview of the Company’s remediation efforts to date, including the implementation 
status of the Monitor’s recommendations, and an assessment of the sustainability of the 
Company’s remediation efforts.  The Certification Report should also recommend the scope of 
the Company’s future self-reporting.  Also at the conclusion of the ninety (90) calendar day 
period following the issuance of the second follow-up report, the Company shall certify in 
writing to the Commission staff, with a copy to the Monitor, that the Company has adopted and 
implemented all of the Monitor’s recommendations in the initial and follow-up report(s), or the 
agreed-upon alternatives. The Monitor or the Company may extend the time period for issuance 
of the Certification Report or the Company’s certification, respectively, with prior written 
approval of the Commission staff. 
Self-Reporting Period 
 
22.  At such time as the Commission staff approves the Certification Report and the 
Company’s certification, the monitorship shall be terminated, and the Company will be permitted 
to self-report to the Commission staff on its enhanced compliance obligations for the remainder 
of the term of the Order. The Commission staff, however, reserves the right to terminate the 
monitorship absent certification by the Monitor, upon a showing by the Company that 
termination is, nevertheless, in the interests of justice. 
23. If permitted to self-report to the Commission staff, the Company shall thereafter 
submit to the Commission staff a written Initial Self-Report and Follow Up Self-Report at six (6) 
month intervals, setting forth a complete description of its remediation efforts to date, its 
proposals to improve the Company’s Policies and Procedures and FCPA compliance program for 

 
 28 
ensuring compliance with the Anti-corruption Laws, and the proposed scope of the subsequent 
reviews. The Company shall disclose any credible evidence that corrupt or otherwise suspicious 
transactions occurred, or payments of things of value were offered, promised, or provided to 
foreign officials, that it learns of that occurred after the date of this Consent. The Company may 
extend the time period for issuance of the self-report with prior written approval of the 
Commission staff. 
Termination or Extension of the Monitorship 
 
24.  If at the conclusion of the ninety (90) calendar-day period following the issuance 
of the second follow-up report, or later follow-up report if applicable, the Commission staff 
concludes in its sole discretion that the Company has not by that time successfully satisfied its 
compliance obligations under the Order, the Term of the Monitorship shall be extended for 
twelve (12) months. Under such circumstances, the Monitor shall commence additional Follow-
Up Reviews in accordance with Paragraphs 16-19. 
25. If at the conclusion of the thirty-six (36) month period the Commission staff 
concludes the Company has not met its obligations under the Order, the Commission staff in its 
sole discretion may extend the Monitorship or Self-Reporting requirements up to forty-eight (48)  
 
months from the issuance of the Order, and require reporting as set forth for Follow-Up Reviews 
or Self-Reporting. 
Extensions of Time 
 
26.  Upon request by the Monitor or the Company, the Commission staff may extend 
any procedural time period set forth above for good cause shown. 

 
 29 
Confidentiality of Reports 
27. The reports submitted by the Monitor and the periodic reviews and reports 
submitted by the Company will likely include confidential financial, proprietary, competitive 
business, or commercial information.  Public disclosure of the reports could discourage 
cooperation, impede pending or potential government investigations, or undermine the objective 
of the reporting requirement.  For these reasons, among others, the reports and the contents 
thereof are intended to remain and shall remain non-public, except (i) pursuant to court order, (ii) 
as agreed to by the parties in writing, (iii) to the extent that the Commission determines in its 
sole discretion that disclosure would be in furtherance of the Commission’s discharge of its 
duties and responsibilities, or (iv) as is otherwise required by law. 
Address for All Written Communications and Reports 
 
 28. All reports or other written communications by the Monitor or the Company 
directed to the Commission staff shall be transmitted to Tracy L. Price, FCPA Unit, Deputy Chief, 
Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street NE, 
Washington D.C. 20549.   
 
 
 

1 

 

                                                                                                             

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 85468 / March 29, 2019 

 

ACCOUNTING AND AUDITING ENFORCEMENT 

Release No. 4033 / March 29, 2019 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-19126 

 

 

In the Matter of 

 

Fresenius Medical Care AG 

& Co. KGaA 

 

Respondent. 

 

 

 

 

CORRECTED ORDER INSTITUTING 

CEASE-AND-DESIST PROCEEDINGS 

PURSUANT TO SECTION 21C OF THE 

SECURITIES EXCHANGE ACT OF 1934, 

MAKING FINDINGS, AND IMPOSING A 

CEASE-AND-DESIST ORDER  

  

I. 
 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Fresenius Medical Care AG & Co. KGaA 

(“FMC” or “Respondent”). 

 

II. 
 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, Respondent admits the Commission’s 

jurisdiction over it and the subject matter of these proceedings, and consents to the entry of this 

Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities 



 

 2 

Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as 

set forth below. 

III. 
 

 On the basis of this Order and Respondent’s Offer, the Commission finds that:  

 

  Summary  

1. This matter concerns violations of the anti-bribery, books and records and internal 

accounting controls provisions of the Foreign Corrupt Practices Act of 1977 (the “FCPA”) [15 

U.S.C. 78dd] by FMC, a world-wide provider of products and services for individuals with chronic 

kidney failure headquartered in Bad Homburg, Germany.  From at least 2009 through 2016, 

millions of dollars in bribes were paid to procure business throughout its operations, including in 

Saudi Arabia, Angola, and eight countries in the West African region.  Further, in FMC’s 

operations in those countries, as well as Turkey, Spain, China, Serbia, Bosnia, and Mexico, 

payments were not accurately reflected in FMC’s books and records.  FMC also failed to have 

sufficient internal accounting controls in place, which contributed to the misconduct continuing for 

many years across multiple continents.  In connection with the misconduct described in Saudi 

Arabia, West Africa, and Angola, FMC employees and agents utilized the means and 

instrumentalities of U.S. interstate commerce, including the use of internet-based email accounts 

hosted by numerous service providers located in the United States.   The company benefitted by 

over $135 million as a result of the improper payments.   

Respondent  

  

 

2. FMC is a provider of products and services for individuals with chronic kidney 

failure.  FMC, operating in over 150 countries, is incorporated under the federal laws of Germany 

and is headquartered in Bad Homburg.  Since 1996, FMC’s American Depositary Shares traded on 

the New York Stock Exchange under the ticker “FMS” and are registered with the Commission 

pursuant to Section 12(b).  The company files periodic reports, including Form 20-F, with the 

Commission pursuant to Section 13(a) of the Exchange Act.   

 

Relevant Entities 

 

3. The misconduct took place in FMC subsidiaries in Morocco, Portugal, Angola, 

Turkey, Spain, China, Serbia, Bosnia, and Mexico.  During the relevant time period FMC’s West 

Africa business was managed and operated from Fresenius Medical Care Deutschland GmbH, a 

limited liability company organized under the federal laws of Germany, and was later operated 

from FMC Morocco. The financials for each subsidiary were consolidated with those of FMC.   

 

4. Saudi Advanced Renal Services Ltd. (“SRS”) is a wholly consolidated distributor 

that promotes and sells FMC’s products in the Kingdom of Saudi Arabia pursuant to a 

Management Assistance Agreement and an Agency and Distributorship Agreement with FMC.  

SRS’s financial statements are consolidated with those of FMC.   



 

 3 

  

FACTS 

Background 
 

5. FMC failed to promptly address numerous red flags of corruption in its operations 

that were known since the early 2000s.  This includes employees making improper payments 

through a variety of schemes, including using sham consulting contracts, falsifying documents, and 

funneling bribes through a system of third party intermediaries.  FMC failed to properly assess and 

manage its worldwide risks, and devoted insufficient resources to compliance.  In many instances, 

senior management actively thwarted compliance efforts, personally engaging in corruption 

schemes and directing employees to destroy records of the misconduct.  The improper conduct 

continued for years in Saudi Arabia, Morocco, eight countries in the West African region, Angola, 

Turkey, Spain, China, Serbia, Bosnia, and Mexico. 

 

Conduct Relevant to Saudi Arabia  

 

6. From 2007 to 2012, FMC’s wholly consolidated distributor Saudi Advanced Renal 

Services (“SRS”) paid over $4.9 million in improper payments to publicly-employed doctors 

(“HCPs”), government officials and others in Saudi Arabia to retain or obtain business.  FMC 

knew of the high risks in the business, but failed to ensure that sufficient internal accounting 

controls were in place.  FMC also failed to assign a compliance officer to the region.  In 2009 and 

early 2011, senior officials at FMC’s German headquarters received reports from a senior SRS 

finance officer that the SRS General Manager (“GM”) submitted false invoices and that there was 

a practice of making improper marketing and travel expenditures without proper documentation.  

The conduct continued and by December 2011, the SRS finance officer elevated his complaints to 

the FMC controller and the head of Internal Audit.  The conduct continued until late 2012 when 

remedial action was first initiated and the GM was terminated in 2013.  Overall, FMC benefitted 

by over $40 million as a result of the corruption schemes in Saudi Arabia.         

 

 7. Payments were made to private and public HCPs, other government officials, and 

high ranking officials at a Saudi Technical Organization that was acting in an official capacity 

for or on behalf of the Kingdom of Saudi Arabia when it reviewed and approved dialysis 

products for use in tenders.  Between 2007 and 2012, SRS generated approximately $1.77 

million through a check writing scheme.  Checks were written to SRS employees who cashed the 

checks and handed the cash to the SRS GM.  SRS employees sometimes stored bags of cash in a 

safe without proper documentation.  The transactions were falsely recorded as project marketing 

expenses and collection commissions in SRS’ books and records, which FMC consolidated.  In 

addition to false descriptions, the transactions lacked appropriate support for the accounting 

entries.   

 

8. Through another scheme, SRS entered into a purported collection commission 

agreement with the relative of a MOH employee in connection with bidding on MOH dialysis 

machine tenders. While SRS had salaried employees that collected overdue receivables from FMC 



 

 4 

customers, the MOH relative was paid over $200,000 for work already performed by these 

employees – which was more than the combined total salary paid to these same employees.  As a 

result, FMC won the tender.  

 

9. A variety of other questionable business schemes included:  i) sham consulting 

agreements with doctors for services never performed, ii) payments to third party agents in which 

doctors had beneficial interest, and iii) improper travel, entertainment, and gifts to doctors.  FMC 

failed to conduct due diligence on the doctors and agents, or take steps to ensure that agreed upon 

services were provided. 

 

10. Some specific examples of the methods used by FMC to make illicit payments to 

doctors in Saudi Arabia are as follows:                        

 

 Improper payments to Doctor A, a high-ranking official at Saudi Technical Organization , who according to 

one email, played a critical role in FMC’s factory avoiding an inspection that “could have shut down the 

factory or made it ineligible for tenders.”  FMC payments to Doctor A were made through commission 

agreements with no evidence of services provided.  On at least one occasion, it was communicated to SRS 

and FMC that Doctor A would not sign necessary papers for FMC products because he had not been paid.  

Doctor A received over $220,000.  FMC also employed two of Doctor A’s family members despite 

knowledge that they were low performers in order to keep the doctor happy.   

 

 Doctor B, another high-ranking official of Saudi Technical Organization and who served as a board 

member of a prominent charity founded by the Saudi government as well as a director of a company that 

provided FMC dialyzers to KSA hospitals, received payments pursuant to contracts with entities owned by 

the doctor or consulting contracts in which there was no evidence that services were performed.  Once the 

contracts expired in 2008, SRS continued to make payments through late 2011 despite the lack of services 

rendered.  Doctor B was paid over $190,000.        

 

 Payments were also made to Doctor C, the CEO of a charity established by a senior Saudi Official and an 

organization very influential in determining MOH tender award recipients.  In one email, the GM stated 

that Doctor C had informed SRS that those who “will support the charity will get the [MOH] orders as 

simple as that.”  Doctor C and his family were also provided with travel that had no business purpose.  In 

addition on March 15, 2012, Doctor C, using an internet-based email account, emailed SRS GM a draft 

commission contract for his assistance in securing contracts on behalf of FMC.  Doctor C received over 

$93,000.   

 

 Head Nurse D, for a military hospital, also received cash payments over $213,000 through both the check-

to-cash scheme and payments as a purported consultant with no proof of services rendered.  SRS made 

product sales valued at approximately $1.467 million and won three MOH tenders for the military hospital. 

 

 Improper gifts valued over $330,000 were provided to doctors and customers without adequate supporting 

documentation with the more expensive gifts given to the more influential customers.     

11.  SRS also made at least $31,000 in improper payments to Saudi customs officials 

through a third-party agent to avoid or reduce penalties and fees.  Invoices from the customs agent 

mischaracterized the payments as handling charges or miscellaneous expenses.  SRS accounting 



 

 5 

records show that $1.76 million of additional payments to the customs agent lacked supporting 

documentation of services it rendered.   

 

12.  Numerous documents were altered, destroyed and falsified in the company’s 

accounting records to conceal the bribes.  The falsification and destruction of records intensified 

once the company’s internal investigation began.  For example, employees created fake accounting 

records to support a $100,000 check-to-cash transaction related to a bid for a multi-billion dollar 

MOH tender.  The discovery of the $100,000 payment led FMC to withdraw from the tender.   

       

Conduct Relevant to Morocco 

 

13. From 2006 to 2010, an FMC Senior Officer and FMC Sales Manager in Germany 

engaged in a scheme to pay bribes to a Moroccan Official, the chief nephrologist at two state 

owned military hospitals, to obtain contracts.  They entered into a sham marketing agreement with 

Moroccan Official to pay him a 10% commission on a contract with Agadir Military Hospital with 

half to be paid in 2007 and afterwards 12.5% annually.   They also agreed to pay him bribes on 

future projects in Morocco including Rabat Military Hospital.     

 

14. In order to get $123,000 in cash for the Moroccan Official, they devised a scheme 

in which they paid a fake bonus to a West Africa manager who had a German bank account.  The 

senior FMC Germany managers assisted in backdating the fake bonus payment and amending 

West Africa manager’s employment contract.  West Africa manager then traveled to Germany with 

the brother of Morocco Official to retrieve the cash from his German bank, which he then gave to 

the brother for the Moroccan Official.  Numerous red flags were overlooked in connection with the 

bonus payment, including that the bonus payment order and contract amendment were clearly 

backdated and didn’t have any relevance to the Moroccan business.   

 

15. Less than one month later, in February 2007, FMC Morocco and the Agadir 

Military Hospital entered into a contract to build and provide products for a dialysis center.  From 

2008 through March 2012, FMC paid the Moroccan Official an additional $111,000 that was also 

funneled through fake bonus payments to another FMC manager.  All the bribe payments were 

falsely recorded as commission payments.  FMC earned over $2.3 million in revenue from the 

Agadir hospital project as a result of its bribery scheme.          

 

16. FMC also paid bribes to the Moroccan Official to obtain a 2009 contract at the 

Rabat Military Hospital, this time using a sham consultant contract with a Moroccan agent 

associated with Moroccan Official.  FMC failed to identify numerous red flags of the corruption, 

including the fact that the contract was backdated and the purported invoices and endorsed checks 

from the Moroccan agent were signed by Moroccan Official’s brother, who was also a FMC 

Morocco manager.  Between 2009 and 2010, FMC paid the agent approximately $221,000 

intended for Moroccan Official and falsely recorded as marketing expenses.   

 

17. In April 2012, FMC received a whistleblower email raising various allegations 

about payments to government officials in Morocco.    In May 2013, FMC received an anonymous 



 

 6 

complaint about improper payments related to military hospitals located in Agadir and Rabat.  

Despite the 2012 allegations, and a subsequent email received in July 2013, FMC did not initiate 

an investigation until January 2014, almost eight months later.  After receiving preservation notices 

in January 2014, some FMC managers destroyed records and deleted files from computers.  

Overall, FMC benefited by over $3 million as a result of the corruption schemes in Morocco.      

 

Conduct Relevant to Eight West African Countries 

 

18. From 2007 to at least 2016, the same FMC Senior Officer and FMC Sales Manager 

who orchestrated the bribe schemes in Morocco also engaged in schemes to bribe publicly-

employed hospital doctors and administrators in eight West African countries to win FMC 

business.  The countries include Gabon, Cameroon, Benin, Burkina Faso, Chad, Ivory Coast, 

Niger, and Senegal.   

  

19. In Gabon for example, from October 2007 to 2009, FMC entered into sham 

consultant agreements with three government hospital executives in return for their assistance in 

obtaining business and timely payments from product sales to Centre Hospitalier de Libreville 

(“CHL”), a public hospital.  FMC agreed to pay the executives a kickback from each dialysis kit 

sold to the hospital, paying the executives over $420,000.  The bribe payments were falsely 

recorded as “export commissions.”    

 

20. Beginning in 2009, a third party agent (“West African Supplier”) was used as a 

conduit for the payments.  FMC paid sham “service fees” to West African Supplier, who passed 

the funds to public HCPs and hospital administrators who had previously been paid through fake 

consultancy agreements.  In May 2010, FMC backdated a service agreement with West African 

Supplier to January 1, 2009 to better conceal the scheme.  From 2009 to 2012, FMC paid West 

African Supplier over $807,000 intended for the three Gabonese hospital executives, and over $2.1 

million intended for doctors in other West African countries.   

 

21. In 2013, West African Supplier’s relationship with FMC was changed from a third 

party agent to a purported distributor. Rather than pay West African Supplier a service fee, it was 

provided with a significant margin on sales to the Ministry of Health, CHL, and other West 

African hospitals to fund the payments to HCPs.  Numerous red flags were present that West 

African Supplier was not a true distributor, including the facts that FMC continued to pay for the 

delivery of its products to customers and that products were sold to West African Supplier at a 

greatly reduced price.    

 

22. A FMC Sales Manager raised concerns about FMC’s loss of revenue using West 

African Supplier as a distributor since they were receiving almost 50% less than what had been 

invoiced to the hospitals under the prior scheme.  The FMC finance director for West Africa 

explained the loss of revenue was justified since West African Supplier was absorbing the costs of 

making the phony commission payments to the doctors.  With the costs shifted to West African 

Supplier, FMC books showed expenses were significantly lower, which enabled FMC executives 

to conceal the bribe payments to the hospital officials.  From 2007 to 2016, FMC made improper 



 

 7 

payments in Gabon of approximately $2.3 million either directly to hospital executives or through 

West African Supplier.      

 

23. FMC also used West African Supplier as a distributor to funnel improper 

commission payments to doctors in return for product sales with public hospitals in Benin, Burkina 

Faso, Ivory Coast, Niger, and Senegal.  The conduct started in 2007 and continued through at least 

2016 when FMC finally terminated the relationship.  Throughout the schemes, an FMC West 

Africa manager used his personal internet-based email accounts to send spreadsheets of bribe 

payments to hospital employees to FMC Germany supervisors, who ensured that the improper 

payments were made.   

 

 24. From 2007 through 2012, FMC engaged in a similar bribery scheme in Cameroon, 

but used a different distributor.  For example, FMC gave one hospital official 15% of all hospital 

sales and gave another doctor five euros per dialysis kit sold.  From 2007 to 2016, approximately 

$1.7 million in improper payments to publicly-employed doctors were made from Cameroon 

Distributor’s margin on the resale of the FMC products.   

 

 25. Despite the ongoing investigations of known corruption in multiple nearby 

countries, FMC failed to implement a sufficient system of internal accounting controls.  The 

bribery schemes in West Africa continued by many of the same FMC managers involved in 

schemes in other countries.  The books and records often lacked adequate documentary support 

and records were falsified.  At the direction of more senior FMC managers, employees altered and 

destroyed documents and deleted files from computers.  Efforts were made to align fictitious 

stories about the misuse of company funds and lower-level employees were berated if they didn’t 

destroy their laptops or delete emails.  Despite multiple red flags of bribery, FMC’s legal, 

compliance, and internal audit functions failed to detect and prevent the bribery.  Employees were 

inadequately trained on the company’s anti-corruption policies, and due diligence on third parties 

was minimal.  Overall, FMC benefited by over $40 million as a result of the corruption schemes in 

West African countries. 

 

Conduct Relevant to Angola 

 

 26. In 2004, FMC South Africa explored entering the Angolan dialysis market and 

generated a report, which was circulated to several FMC employees, including FMC EMEA 

Executive Vice President, that raised red flags about corruption, most notably that Angola’s 

Director of Military Services (“Military Official”) received a 20% commission on all dialysis kits 

sold to military hospitals and that Angolan Reseller was partially owned by government officials.  

An August 7, 2007 email also warned of “concerns about this direct market entry . . . . [that] will 

require some extra precaution, documentation, and management attention.” 

   



 

 8 

27. In 2008, FMC Portugal began selling products into Angola through Angolan 

Reseller, which was partly owned by Military Official.  Further, FMC did not adequately train its 

FMC Portugal employees about their dealings with government officials until late 2012.  As a 

result, from 2008 to 2010, bribes were paid in the form of 20% commissions to Military Official 

through Angolan Reseller.  

 

28. In 2008, FMC created FMC Angola, a separate legal entity intended to make sales 

into Angola with FMC Portugal retaining management.  By 2010, FMC’s relationship with its 

reseller became fractured.  In June 2010, FMC Portugal orchestrated a scheme by which it 

provided a 35% stake in FMC Angola to prominent Angolan nephrologists, including Military 

Official, as well as to Angolan Doctor A, a key nephrologist at several Angolan public hospitals 

that were state-owned entities.  In April 2011, FMC granted a power of attorney to execute the 

share transfer, signed by FMC’s senior legal and compliance officer and an FMC Board of 

Management member.  In January 2012, the shares were transferred to the Angolan officials 

without their having paid anything in exchange and without any due diligence conducted on the 

transaction.    

 

29. FMC Angola also entered into a business relationship with Angolan Distributor, 

owned equally by the sons of Military Officer.  First, FMC Angola paid Angolan Distributor 

$559,972 for “temporary storage” services without a contract or actual services performed.  FMC 

Angola also entered into a contract with Angolan Distributor for “the Provision of Logistics 

Services” whereby Angolan Distributor was to provide warehousing storage for $77,300 per 

month, which it received despite never providing the warehousing.  FMC Angola in fact already 

had a lease agreement with another warehouse for the same services at a cost three times less than 

the costs charged by Angolan Distributor.   

 

30. In June 2012, a draft internal audit report identified that in Angola “overall controls 

are not functioning as intended” and flagged the Angolan Distributor temporary storage 

arrangement as a problem since (1) the owner of the company was a shareholder of FMC Angola 

and (2) there was a total lack of written documentation relating to the services.  FMC Legal and 

Compliance issued a directive in October 2012 freezing all payments to Angolan Distributor.  

Despite the directive, FMC Angola continued to accrue an additional $878,900 on its books for 

storage services never rendered, but ultimately was prevented from making the payment.   

 

31. During the freeze period, in addition to the temporary storage contract with 

Angolan Distributor, FMC made Angolan Distributor its exclusive distributor in Angola of certain 

products and gave Angolan Distributor one of FMC’s largest clients as a customer.  The distributor 

arrangement thereby created a significant margin, approximately 60% of sales, that was provided 

to the government officials on over $433,000 in sales.   

 

32. FMC’s senior managers both in Portugal and at the parent level failed to take any 

timely steps to put a stop to the numerous conflicts raised by the Angolan Distributor relationship.  

FMC Portugal misled FMC’s internal audit team when they tried to determine if additional 

relationships with the Angolan Distributor existed.  Only upon being instructed in July 2013 to 



 

 9 

“Please freeze the contract” did a senior FMC Portugal manager report that Angolan Distributor 

had been made a distributor for certain sales without any written contract.     

 

33. Despite this new information, it took until November 2013 for an FMC Legal and 

Compliance team to review the relationship with Military Officer and the other minority 

shareholders, including examining “the applicability and justification of dividends for shareholders 

who have not paid for their interest in the company yet.”  FMC Legal and Compliance ultimately 

concluded in December 2013 that these facts raised “a serious issue under our company’s 

government procedures and a problematic behavior . . . . it cannot be questioned that a clear 

management board directive” was not followed.  

 

 34. During the entire time, FMC Angola also made payments to the other minority 

shareholders, Angolan Doctor A and Angolan Doctor B, both government officials, by entering 

into consulting contracts with each doctor.  Per contracts, Angolan Doctor A was paid $7,500 per 

month while Angolan Doctor B was paid $3,140 monthly.  Angolan Doctor A discussed his 

consultancy payments with FMC using his personal internet-based email account.  Pursuant to 

these contracts and other salary payments, the doctors received a total of approximately $400,000 

from FMC.  There was no review of the contracts, no apparent due diligence for conflicts of 

interest, and no documentation of services.  Overall, FMC benefited by over $10 million as a result 

of the corruption schemes in Angola. 

 

Conduct Relevant to Turkey  

 

35. Between 2005 and 2014, FMC Turkey entered into four separate joint ventures with 

publicly employed doctors in exchange for those doctors directing business from their public 

employer to FMC clinics.  The doctors did not provide any capital in exchange for their shares.  In 

some cases, doctors’ shares were held in the names of other individuals.  

 

36. In a 2007 internal presentation by a FMC Turkey Vice-President, FMC Turkey set 

forth a strategy to “select and find ways to work with nephrologists who refer the patients from the 

important state hospitals.” The presentation included a proposal to pay salaries and bonuses to 

doctors and provide them with 20-30% shares in joint ventures in exchange for the doctors 

directing patients to FMC Turkey clinics.   

 

37. In one joint venture involving a prominent doctor at a public hospital in Diyarbakir, 

a senior manager at FMC Germany wrote: “The professor who is our shareholder has very strong 

relations with all state authorities including the university and other state hospitals.  He is in a way 

protector of our interests, benefits and operation in the city….  It is very hard to compete and 

operate in this city if a powerful local is not backing you….  He should stay as our doctor for the 

health and wellbeing of our system in this city.” 

 

38. After recapitalizing the JV, FMC paid that same doctor over $350,000 for his 

unpaid interest in the JV, a payment that was based in part on patient enrollment.  Then in 2013, 

FMC Turkey sold the clinic’s assets to the doctor for $830,000.  The FMC AG Board of 



 

 10 

Management approved the sale to the doctor in June 2013.  As early as at least 2008, FMC senior 

management were aware that the doctor did not pay for his initial 35% stake in the clinic, and that 

his shares were being held in someone else’s name.     

 

39. In Erzurum, FMC gave shares to a professor with ties to the Turkish Minister of 

Health, for referring patients from the university’s clinics.  The professor didn’t make any capital 

contributions for his shares.  Ultimately, the professor was paid $323,000 for his 40% stake despite 

having an outstanding $1,553,000 receivable.  FMC Turkey managers discussed the need to make 

the payment to the professor despite the outstanding receivable.  In one exchange among FMC 

managers, they noted that if they pushed for payment the “[Professor] would immediately turn his 

back to us and fight with us.  Knowing his before mentioned local and country level power, … he 

would ask the doctors to refer back their patients to state hospital clinic and would also ask the 

doctors to change to [a FMC competitor] all our PD patients.”   

 

40. In one JV that should have raised significant red flags, the approval request to the 

FMC Board of Management stated that three doctors “currently working in the dialysis unit of the 

State Hospital will participate in the startup both as shareholders and employees.  It is expected that 

on opening 60 patients will be referred from the State Hospital to the new clinic.” An email among 

FMC Turkey senior management noted “Our expectations regarding [Yalova] are high as we have 

very powerful doctors as partners in these startups.  So after a year’s time we expect high patient 

numbers and at least breakeven results in two years and a profitable operation after then.”  None of 

the doctors contributed capital for their shares.      

 

41. In another example, in Kayseri, FMC Turkey entered into a joint venture with a 

nephrologist at the state hospital, noting “After 2 years, when the patient number increases preset 

levels, [the doctor] will sell their shares at preset amounts and their debt to the company will be 

deducted from this amount and the rest will be paid to them.”  In August 2012, FMC Turkey 

entered into a share purchase agreement to purchase the doctor’s 20% interest, which provided for 

a purchase price predicated on the number of patients at the clinic.  Between 2012 and 2013, the 

doctor received $63,000.  In 2014, he received $451,000 in cash and debt reductions, including 

debts unrelated to the transaction, for his 20% stake.  The payment was based principally on the 

number of patients enrolled at the clinic at the time of the sale.  Overall, FMC benefited by over $1 

million as a result of the improper conduct in Turkey.       

 

Conduct Relevant to Spain 

 

42. In certain public tenders between 2007 and 2014, FMC Spain received advance 

information about tender specifications from publicly employed doctors or administrators.  Some 

of those doctors received improper payments from FMC Spain, including pursuant to consulting 

agreements, or other benefits such as travel to medical congresses, trips to the United States, 

donations to fund projects for the doctors, and gifts.  In some of these tenders, FMC Spain sought 

to have the doctors modify aspects of the tenders before the tenders were publicly announced or to 

direct hospital sales to FMC.       

 



 

 11 

43. FMC Spain entered into numerous consulting agreements with publicly employed 

doctors with limited or no due diligence or compliance review.  FMC Spain failed to adequately 

document services performed by doctors who also assisted in obtaining or retaining business.  Per 

the agreements, fixed amounts to be paid to the doctors as “consultants” ranged from $16,000 to 

approximately $187,000 per year.  Sometimes payments were made without a written agreement.   

 

44. For example, in connection with a 2011 tender held by a Valencia state-owned 

hospital, FMC Spain provided Spain Doctor A with draft tender technical specifications and 

improvements, a draft scoring methodology, and proposed scores to win the tender.  The doctor 

used his personal email account to agree to some of the proposals with FMC winning the $2 

million tender.  FMC Spain paid Spain Doctor A over $114,000 between 2008 and 2011.  A 

donation of over $40,000 was made to the hospital’s foundation for the doctor’s training programs, 

and additional payments were made to the doctor between 2012 and 2014 of $51,600, along travel 

sponsorships and gifts.   

 

45. According to a December 2014 email between senior FMC managers discussing 

influencing a 2015 tender at a state-owned hospital in Torrecardenas, the company “got [Spain 

Doctor B] to decide to support [FMC Spain] to obtain 60% of the adjudication.”  Afterward, FMC 

won 60% of the tender, valued at approximately $3 million.  Spain Doctor B received payments 

from FMC, as well as travel sponsorships and gifts.   

 

46. In some instances, FMC Spain made improper payments to doctors to refer patients 

to FMC clinics or to use more expensive FMC products.  Payments were sometimes made to the 

doctors indirectly through consortiums owned by the doctors, or by FMC acquiring businesses 

from the doctors and, thereafter, paying for the use of the buildings in which the businesses were 

located. 

 

47. For example, FMC Spain made improper payments and provided benefits to six 

publicly-employed doctors at a Spanish state-owned hospital.  FMC Spain acquired a clinic owned 

by the doctors and then paid them 5% of all subsequent sales, and then later leased space from the 

doctors.  FMC Spain provided additional compensation to the six doctors by entering into a 

consulting agreement with various forms of businesses owned by the doctors.  In total, FMC paid 

the doctors over $3 million.   

 

48. In 2010, FMC’s Internal Audit team found FMC Spain failed to comply with the 

company’s policy concerning dealings with foreign officials.  In 2014, another Internal Audit 

report, sent to the same recipients as the 2010 report and the entire FMC Management Board, 

raised significant red flags about FMC Spain’s payments to public officials, including a lack of 

documentation for payments related to gifts, donations, sponsorships, commissions, and 

consultancy payments.  The payments to doctors continued until 2015.  Many of these payments 

were improperly recorded as consulting expenses in the books and records of FMC and FMC 

Spain.  Overall, FMC benefited by over $20 million as a result of the improper conduct. 

 



 

 12 

Conduct Relevant to China 

 

49. From 2007 to 2014, FMC China’s clinic business, Nephrocare, planned and 

implemented incentive programs in which bonus payments were provided to publicly-employed 

HCPs with which FMC China had supply agreements.  The amounts of the payments were based 

in part on the number of treatments provided and/or the number of new patients treated, and were 

taken into consideration in the clinics’ financial models.  Certain emails between FMC China 

personnel suggest that the purpose of the bonus payments was to influence clinic procurement 

decisions. 

 

50. During this time period, approximately $6.4 million in expense accrual entries were 

related to such bonuses.  However, only $1.7 million of the $6.4 million were reconciled to specific 

payments.  Of the remaining $4.7 million in accruals, the FMC China accounting records failed to 

adequately tie the accruals and payments.  They were recorded either in the year-end bonus or 

other promotional expenses general ledger accounts, and were generally described in underlying 

accounting records as “center marketing fees.”  The inaccurate record-keeping can be attributed to 

a senior FMC China manager, who cautioned a fellow employee in 2011 to avoid the use of the 

term bonus due to “internal legal compliance” concerns when describing these payments.   

 

51. As a general practice, these bonuses would be paid once FMC China received 

payments it was owed from hospitals for equipment purchases.  Payments were made directly to 

the doctors and nurses responsible for managing the clinics and in positions to influence clinic 

procurement decisions.  Some payments were made in cash, while others were made by wire 

transfer, and later by a third party agent.  FMC China stopped using the third party agent in 2014 

after an internal audit report raised concerns that the agent was being paid without corresponding 

reports showing proof of services rendered.  Overall, FMC benefited by over $10 million as a 

result of the improper conduct. 

 

Conduct Relevant to the Balkan Region (Serbia and Bosnia) 

 

52. From 2007 to 2014, four doctors were paid over $329,000 by FMC while serving 

on the Serbian Health Fund (“RFZO”) commission or other public tender commission while FMC 

sought business from those same public commissions.  FMC also paid for side trips and extra day 

accommodations for publicly-employed doctors in connection with travel to medical conferences.  

For example in 2008, FMC paid $393,000 for travel and accommodations for those same four 

dual-employed doctors and their spouses to attend a conference in Philadelphia, PA, which 

included non-business side trips to New York City and Cancun, Mexico.  Doctors were also 

provided laptops and GPS devices.       

 

53. FMC paid dual-employed doctors through a Serbian Agent.  In 2010, FMC 

compliance issued a directive prohibiting the use of Serbian Agent and requiring that service 

contracts have more specificity to support payments.  The directive was circumvented when an 

FMC Serbia executive approved payments through a third-party transport vendor, who then paid 

over $170,000 to the dual-employed doctors.    FMC also made over $1 million in payments to 



 

 13 

“speed up” the clinic privatization process for four clinics. The consultant’s quarterly reports used 

to support the payments were drafted by FMC senior managers.  In another instance, FMC senior 

managers gave a distributor, operated by a Serbian doctor, cash payments of over $62,000 plus 10 

dialysis machines free of charge, which he resold to FMC for $139,500 to prolong a tender silently 

and avoid import taxes.   

 

54. In Bosnia, FMC also made improper payments to a prominent Bosnian government 

doctor to support FMC’s bid to win a government tender to establish and operate clinics in the 

regions of Srpska and Brcko.  In November 2008, the doctor was elected to the Brcko Assembly.  

A 2008 fourth quarter activity report from the doctor to FMC listed as an achievement for the 

quarter “removing all problems regarding the tender in Brcko.”  FMC initially failed to investigate 

the meaning of that entry and instead paid the doctor $80,850 in December 2008.  In February 

2009, the doctor was elected the mayor of Brcko and thereafter the consultant agreement was 

placed in the name of the doctor’s wife.  By 2009, FMC paid the doctor over $1.3 million to 

successfully win the bid.  FMC also made over $957,000 in payments to a Bosnian healthcare 

executive to assist FMC’s establishment of clinics in Brcko and Hercegovina, without any 

evidence of services performed.  Overall, FMC benefited by over $10 million as a result of the 

improper conduct in Serbia and Bosnia.         

               

Conduct Relevant to Mexico 

 

 55. In 2010, FMC Mexico engaged in a scheme to increase the price per dialysis kit for 

a tender with one of its largest customers in Mexico, Instituto Mexicano del Seguro Social 

(“IMSS”), Mexico’s state-run social insurance agency.  FMC Mexico employed the services of a 

third party agent, Mexican Distributor, to pay kickbacks to IMSS officials relating to the tender 

bid.  Among other products, Mexican Distributor sold medical kits used in hemodialysis 

treatments.   

 

 56. In January 2010, FMC Mexico was awarded a portion of an IMSS subrogation 

tender, at an agreed reimbursement price of $92 per treatment, which reflected a price increase that 

Mexican Distributor supposedly negotiated for its kits.  On December 8, 2010, almost a full year 

after the IMSS tender award, FMC Mexico’s General Director and Chief Financial Officer 

executed a contract with Mexican Distributor, agreeing to pay Mexican Distributor a commission 

of $0.40 per treatment performed on IMSS patients in 2010 and $0.20 per treatment in 2011.  The 

retroactive contract improperly identified the commissions as being for “advice.”   

 

57. An FMC internal audit report found several problems with this arrangement, 

including insufficient evidence that Mexican Distributor rendered services that contributed to the 

increase in price, the contract was signed a year after services were supposedly rendered, and 

monetary payments were made retroactively.  The audit identified $213,500 in improper 

commissions paid to Mexican Distributor intended in part for IMSS officials in 2010 and 2011. 

Overall, FMC benefited by over $2 million as a result of the improper conduct.  

   



 

 14 

Legal Standards and Violations 

58. Under Section 21C of the Exchange Act, the Commission may impose a cease-and-

desist order upon any person who is violating, has violated, or is about to violate any provision of 

the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, or 

would be a cause of the violation, due to an act or omission the person knew or should have known 

would contribute to such violation. 

59.  As a result of conduct described above in Saudi Arabia, Angola and West Africa,  

FMC violated Section 30A of the Exchange Act, which in relevant part makes it unlawful for an 

issuer with securities registered under Section 12 of the Exchange Act or which is required to file 

reports under Section 15(d) of the Exchange Act, or any employee or agent acting on its behalf, to 

make use of the mails or any means or instrumentality of interstate commerce corruptly in 

furtherance of an effort to pay or offer to pay anything of value to foreign officials for the purpose 

of influencing their official decision-making, in order to assist in obtaining or retaining business.  

Finally, each FMC subsidiary and entity was also an “agent” of FMC within the meaning of the 

Foreign Corrupt Practices Act. 

 

60. Further, as a result of the conduct described in each of the countries above, FMC 

violated Section 13(b)(2)(A) of the Exchange Act, which requires issuers to make and keep books, 

records, and accounts which, in reasonable detail, accurately and fairly reflect their transactions 

and dispositions of the assets of the issuer.  

 61. In addition, as a result of the conduct described in each of the countries above, 

FMC violated Section 13(b)(2)(B) of the Exchange Act, which requires issuers to devise and 

maintain a system of internal accounting controls sufficient to provide reasonable assurances that 

(i) transactions are executed in accordance with management’s general or specific authorization; (ii) 

transactions are recorded as necessary (I) to permit preparation of financial statements in conformity 

with generally accepted accounting principles or any other criteria applicable to such statements, 

and (II) to maintain accountability for assets; (iii) access to assets is permitted only in accordance 

with management’s general or specific authorization; and (iv) the recorded accountability for assets 

is compared with the existing assets at reasonable intervals and appropriate action is taken with 

respect to any differences.   

 

FMC’s Self-Disclosure, Cooperation, and Remedial Efforts 

 

62. In determining to accept the Offer, the Commission considered remedial acts 

promptly undertaken by Respondent and cooperation afforded the Commission staff.  FMC self-

reported certain misconduct and voluntarily provided facts developed during its internal 

investigation.  FMC’s cooperation with the Commission’s investigation varied at times.  FMC 

produced documents, including key document binders and translations as needed, and made 

current or former employees available to the Commission staff, including those who needed to 

travel to the United States.  

 



 

 15 

63. FMC’s remediation included the termination of employees and third parties 

responsible for the misconduct and enhancements to its internal accounting controls.  FMC 

strengthened its global compliance organization; enhanced its policies and procedures regarding 

the due diligence process and the use of third parties; created positions to address potential risks; 

and increased training of employees on anti-bribery issues. 

 

Undertakings 
 

 64. Respondent undertakes to engage an Independent Compliance Monitor and report 

to the Commission staff periodically pursuant to the provisions set forth in Attachment A of the 

Order.  

  

 65. Respondent undertakes to require the Independent Compliance Monitor to enter 

into an agreement that provides that for the period of engagement and for a period of two years 

from completion of the engagement, the Independent Compliance Monitor shall not enter into any 

employment, consultant, attorney-client, auditing or other professional relationship with 

Respondent, or any of its present or former affiliates, directors, officers, employees, or agents 

acting in their capacity.  The agreement will also provide that the Independent Compliance 

Monitor will require that any firm with which he/she is affiliated or of which he/she is a member, 

and any person engaged to assist the Independent Compliance Monitor in performance of his/her 

duties under this Order shall not, without prior written consent of the Division of Enforcement, 

enter into any employment, consultant, attorney-client, auditing or other professional relationship 

with Respondent, or any of its present or former affiliates, directors, officers, employees, or agents 

acting in their capacity as such for the period of the engagement and for a period of two years after 

the engagement. 

 

 66. Certify, in writing, compliance with the undertaking(s) set forth above.  The 

certification shall identify the undertaking(s), provide written evidence of compliance in the form 

of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  The 

Commission staff may make reasonable requests for further evidence of compliance, and 

Respondent agrees to provide such evidence.  The certification and supporting material shall be 

submitted to Tracy L. Price, Deputy Chief, FCPA Unit, Division of Enforcement, U.S. Securities 

and Exchange Commission, 100 F Street, N.E., Mail Stop 5631, Washington, D.C. 20549, with a 

copy to the Office of Chief Counsel of the Enforcement Division, no later than sixty (60) days 

from the date of the completion of the undertakings.    

 

 67. Respondent undertakes to do the following:  in connection with this action and any 

related judicial or administrative proceeding or investigation commenced by the Commission or to 

which the Commission is a party, Respondent (i) agrees to appear and be interviewed by 

Commission staff at such times and places as the staff requests upon reasonable notice; (ii) will 

accept service by mail or facsimile transmission of notices or subpoenas issued by the Commission 

for documents or testimony at depositions, hearings, or trials, or in connection with any related 

investigation by Commission staff; (iii) appoints Respondent's undersigned attorney as agent to 

receive service of such notices and subpoenas; (iv) with respect to such notices and subpoenas, 



 

 16 

waives the territorial limits on service contained in Rule 45 of the Federal Rules of Civil Procedure 

and any applicable local rules, provided that the party requesting the testimony reimburses 

Respondent's travel, lodging, and subsistence expenses at the then-prevailing U.S. Government per 

diem rates; and (v) consents to personal jurisdiction over Respondent in any United States District 

Court for purposes of enforcing any such subpoena. 

  

Non-Prosecution Agreement 

 

 68. FMC has entered into a three-year non-prosecution agreement with the United 

States Department of Justice that acknowledges responsibility for criminal conduct relating to 

certain findings in the Order.   

 

Non-Imposition of a Civil Penalty 

 

69. FMC acknowledges that the Commission is not imposing a civil penalty based  

upon the imposition of an $84.7 million criminal fine as part of its resolution with the Department 

of Justice.   

 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent FMC’s Offer. 

 

 Accordingly, pursuant to Section 21C of the Exchange Act, it is hereby ORDERED that: 

 

 A. Respondent FMC cease-and-desist from committing or causing any violations and 

any future violations of Sections 30A, 13(b)(2)(A) and 13(b)(2)(B)  of the Exchange Act [15 U.S.C. 

§§ 78m(b)(2)(A), 78m(b)(2)(B), and 78dd-1]. 

 

 B. Respondent shall comply with its Undertakings as enumerated in paragraphs 64 to 

67 above.  

 

 C. Respondent shall, within fourteen days of the entry of this Order, pay disgorgement 

of $135 million and prejudgment interest of $12 million, for total payment of $147 million to the 

Securities and Exchange Commission for transfer to the general fund of the United States Treasury, 

subject to Exchange Act Section 21F(g)(3).  If payment of disgorgement and prejudgment interest is 

not made by the date the payment is required by this Order, additional interest shall accrue pursuant 

to SEC Rule of Practice 600.   

 

Payment must be made in one of the following ways:    

 

(1) Respondent may transmit payment electronically to the Commission, which will 

provide detailed ACH transfer/Fedwire instructions upon request; 

 



 

 17 

(2) Respondent may make direct payment from a bank account via Pay.gov through the 

SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United States 

postal money order, made payable to the Securities and Exchange Commission and 

hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

 Payments by check or money order must be accompanied by a cover letter identifying 

FMC as a Respondent in these proceedings, and the file number of these proceedings; a copy of the 

cover letter and check or money order must be sent to Tracy L. Price, Deputy Chief, FCPA Unit, 

Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 

20549-5631. 

 

D. Respondent acknowledges that the Commission is not imposing a civil penalty 

based in part upon its cooperation in a Commission investigation and related enforcement action.  

If at any time following the entry of the Order, the Division of Enforcement (“Division”) obtains 

information indicating that Respondent knowingly provided materially false or misleading 

information or materials to the Commission, or in a related proceeding, the Division may, at its 

sole discretion and with prior notice to the Respondent, petition the Commission to reopen this 

matter and seek an order directing that the Respondent pay an additional civil penalty.  

Respondent may contest by way of defense in any resulting administrative proceeding whether it 

knowingly provided materially false or misleading information, but may not:  (1) contest the 

findings in the Order; or (2) assert any defense to liability or remedy, including, but not limited 

to, any statute of limitations defense. 

 

 By the Commission. 

 

 

 

       Vanessa A. Countryman 

       Acting Secretary 

 

 

 

 

 

 

 

http://www.sec.gov/about/offices/ofm.htm


 

 18 

Attachment A 

Independent Compliance Monitor 

Retention of Monitor and Term of Engagement 

 1. Fresenius Medical Care AG & Co. KGaA (“Company”) shall engage an 

independent compliance monitor (the “Monitor”) not unacceptable to the staff of the Commission 

within sixty (60) calendar days of the issuance of the Order.  The Monitor shall have, at a 

minimum, the following qualifications: (i) demonstrated expertise with respect to the FCPA and 

other applicable anti-corruption laws, including experience counseling on FCPA issues; (ii) 

experience designing or reviewing corporate compliance policies, procedures, and internal 

accounting controls, including FCPA and anti-corruption policies and procedures; (iii) the ability 

to access and deploy resources as necessary to discharge the Monitor’s duties; and (iv) sufficient 

independence from the Company to ensure effective and impartial performance of the Monitor’s 

duties.  The Commission staff may extend the Company’s time period to retain the Monitor, in its 

sole discretion.  If the Monitor resigns or is otherwise unable to fulfill the obligations herein, the 

Company shall within thirty (30) days retain a successor Monitor that has the same minimum 

qualifications as the original monitor and that is not unacceptable to the Commission staff.   

 2. The Company shall retain the Monitor for a period of not less than twenty-four 

(24) months from the date the Monitor is retained (the “Term of the Monitorship”), unless the 

Commission staff finds, in its sole discretion, that there exists a change in circumstances 

sufficient to terminate the Monitorship early or extend the Monitorship as set forth in paragraphs 

24-25 (Termination or Extension of Monitorship).   



 

 19 

Company’s Obligations 

 3. The Company shall cooperate fully with the Monitor and provide the Monitor with 

access to all non-privileged information, documents, books, records, facilities, and personnel as 

reasonably requested by the Monitor, which fall within the Monitor’s mandate; such access shall 

be provided consistent with the Company’s and the Monitor’s obligations under applicable local 

laws and regulations, including but not limited to, applicable data privacy and national security 

laws and regulations.  The Company shall use its best efforts, to the extent reasonably requested, to 

provide the Monitor with access to the Company’s former employees, third party vendors, agents, 

and consultants.  The Company does not intend to waive the protection of the attorney work 

product doctrine, attorney-client privilege, or any other privilege applicable as to third parties. 

 4. The parties agree that no attorney-client relationship shall be formed between the 

Company and the Monitor.  In the event that the Company seeks to withhold from the Monitor 

access to information, documents, books, records, facilities, current or former personnel of the 

Company, its third-party vendors, agents, or consultants that may be subject to a claim of attorney-

client privilege or to the attorney work-product doctrine, or where the Company reasonably 

believes production would otherwise be inconsistent with the applicable law, the Company shall 

work cooperatively with the Monitor to resolve the matter to the satisfaction of the Monitor.  If, 

during the Term of the Monitorship, the Monitor believes that the Company is unreasonably 

withholding access on the basis of a claim of attorney-client privilege, attorney work-product 

doctrine, or other asserted applicable law, and cannot resolve the matter cooperatively with the 

Company, the Monitor shall notify the Commission staff. 



 

 20 

 5. Upon entry of this Order and during the Term of the Monitorship, should the 

Company learn of credible evidence or allegations of corrupt payments, false books, records, or 

accounts, or the failure to implement adequate internal accounting controls, the Company shall 

promptly report such credible evidence or allegations to the Commission staff.  Any disclosure by 

the Company to the Monitor concerning credible evidence of corrupt payments, false books and 

records, or internal accounting control issues shall not relieve the Company of any otherwise 

applicable obligation to truthfully disclose such matters to the Commission staff.   

Monitor’s Mandate 

 6. The Monitor shall review and evaluate the effectiveness of the Company’s policies, 

procedures, practices, internal accounting controls, recordkeeping, SOX controls, and financial 

reporting processes (collectively, “Policies and Procedures”), as they relate to the Company’s 

current and ongoing compliance with the anti-bribery, books and records, and internal accounting 

controls provisions of the FCPA and other applicable anti-corruption laws (collectively, “Anti-

corruption Laws”), and make recommendations reasonably designed to improve the effectiveness 

of the Company’s Policies and Procedures and FCPA corporate compliance program (the 

“Mandate”).  This Mandate shall include an assessment of the Management and Supervisory 

Boards and senior management’s commitment to, and effective implementation of, the Policies and 

Procedures and FCPA corporate compliance program.  In carrying out the Mandate, to the extent 

appropriate under the circumstances, the Monitor may coordinate with the Company personnel, 

including in-house counsel or through designated outside counsel, compliance personnel, and 

internal auditors.   To the extent the Monitor deems appropriate, it may rely on the Company’s 

processes, and on sampling and testing methodologies.  The Monitor is not expected to conduct a21 

comprehensive review of all business lines, all business activities, and all markets.  This Mandate 

shall not apply to Fresenius Medical Care Holdings, Inc. and its subsidiaries, to the extent that 

those entities and/or their employees and agents operate exclusively within the United States.  

Nonetheless, the Monitor may seek a briefing on the regulatory environment and the structure of 

the compliance program in the United States.  If requested by the Monitor, the Company shall 

provide such a briefing, with reasonable consideration of the scope of the Mandate.  Any disputes 

between the Company and the Monitor with respect to the Work Plan shall be decided by the 

Commission staff in its sole discretion. 

 7.   During the Term of the Monitorship, the Monitor shall conduct an initial review 

and two follow-up reviews and prepare an initial report and a first and second follow-up report, 

and issue a Certification Report if appropriate, as described below. 

Initial Review and Report 

 8. Promptly upon being retained, the Monitor shall prepare a written Work Plan, 

which shall be submitted to the Company and the Commission staff for comment no later than 

thirty (30) days after being retained. 

9. In order to conduct an effective Initial Review and to understand fully any existing 

deficiencies in the Company’s Policies and Procedures and FCPA corporate compliance program, 

the Monitor’s Work Plan shall include such steps as are reasonably necessary to understand the 

Company’s business and its global anti-corruption risks.  The steps shall include: 

(a) inspection of relevant documents, including the internal accounting 

controls, recordkeeping, and financial reporting policies and procedures as 

they relate to the Company’s compliance with the books and records, 



 

 22 

internal accounting controls, and anti-bribery provisions of the FCPA and 

other applicable anti-corruption laws; 

(b) onsite observation of selected systems and procedures comprising the 

Company’s Policies and Procedures and FCPA corporate compliance 

program, including anti-corruption compliance procedures, internal 

accounting controls, recordkeeping, due diligence, and internal audit 

procedures, including at sample sites; 

(c) meetings with, and interviews of, as relevant, the Company employees, 

officers, directors, and, where appropriate and feasible, its third-party 

vendors, agents, or consultants and other persons at mutually convenient 

times and places; and 

(d) risk-based analyses, studies, and testing of the Company’s FCPA 

corporate compliance program. 

10. The Monitor may take steps as reasonably necessary to develop an understanding 

of the facts and circumstances surrounding prior FCPA violations that gave rise to this action 

or violations of other applicable Anti-corruption Laws, but shall not conduct his or her own 

inquiry into those historical events. 

11. After receiving the Initial Review Work Plan, the Company and Commission staff 

shall provide any comments concerning the Initial Review Work Plan within fifteen (15) days to 

the Monitor.  Any disputes between the Company and the Monitor with respect to the Initial 

Review Work Plan shall be decided by the Commission staff in its sole discretion.  Following 



 

 23 

comments by the Company and Commission staff, the Monitor will have ten (10) days to submit a 

Final Initial Review Work Plan. 

12. The Initial Review shall commence no later than sixty (60) days from the date of 

the engagement of the Monitor (unless otherwise agreed by the Company, the Monitor, and the 

Commission staff).  The Monitor shall issue a written report within one hundred twenty (120) days 

of commencing the Initial Review, setting forth the Monitor’s assessment and, if necessary, 

making recommendations reasonably designed to improve the effectiveness of the Company’s 

Policies and Procedures and FCPA corporate compliance program as they relate to the Company’s 

compliance with the FCPA and other applicable Anti-corruption Laws.  The Monitor should 

consult with the Company concerning his or her findings and recommendations on an ongoing 

basis and should consider the Company’s comments and input to the extent the Monitor deems 

appropriate.  The Monitor may also choose to share a draft of his or her report with the Company 

and Commission staff prior to finalizing it.  The Monitor shall provide the report to the 

Management Board of the Company and contemporaneously transmit a copy to Commission staff. 

13. Within ninety (90) days after receiving the Monitor’s Initial Review Report, the 

Company shall adopt and implement all recommendations in the report, provided, however, that as 

to any recommendation that the Company considers unduly burdensome, impractical, costly, or 

inconsistent with applicable law or regulation, the Company need not adopt that recommendation 

at that time, but may submit in writing to the Monitor and the Commission staff within fifteen (15) 

days of receiving the report, an alternative policy, procedure, or system designed to achieve the 

same objective or purpose. 



 

 24 

14. In the event the Company and the Monitor are unable to agree on an acceptable 

alternative proposal, the Company shall promptly consult with the Commission staff.  Any 

disputes between the Company and the Monitor with respect to the recommendations shall be 

decided by the Commission staff in its sole discretion.  The Commission staff shall consider the 

Monitor’s recommendation and the Company’s reasons for not adopting the recommendation in 

determining whether the Company has fully complied with its obligations.  Pending such 

determination, the Company shall not be required to implement any contested recommendation(s). 

15. With respect to any recommendation that the Monitor determines cannot 

reasonably be implemented within ninety (90) days after receiving the report, the Monitor may 

extend the time period for implementation with prior written approval of the Commission staff. 

Follow Up Reviews 

16. The Monitor shall conduct a minimum of two Follow-Up Reviews. The Monitor 

shall submit a written work plan for each follow-up review to the Company and Commission 

staff within sixty (60) calendar days after the issuance of either the initial report, or the 

applicable follow-up report. The Company and Commission staff shall provide any comments 

concerning the work plan within fifteen (15) calendar days in writing to the Monitor. Any 

disputes between the Company and the Monitor with respect to the written work plan shall be 

decided by the Commission staff in its sole discretion. Following comments by the Company 

and Commission staff, the Monitor will have ten (10) calendar days to make revisions to the 

follow-up work plan. 

17. The Monitor shall commence the follow-up review pursuant to the work plan no 

later than ninety (90) calendar days after the issuance of the initial report, or applicable follow-up 



 

 25 

report, (unless otherwise agreed by the Company, the Monitor and the Commission staff). The 

Monitor shall issue its written follow-up report within one hundred-twenty (120) calendar days 

of commencing the follow-up review. The follow-up report shall set forth the Monitor’s 

assessment of, and any additional recommendations regarding, the Policies and Procedures as 

they relate to the Company’s compliance with the Anti-corruption Laws; the Monitor’s 

assessment of the implementation by the Company of any recommendations made in the initial 

report, or follow-up report if applicable; and the Monitor’s assessment of the commitment of the 

Company’s Supervisory and Management Boards and senior management to compliance with 

the FCPA. 

18. Within ninety (90) days after receiving the Monitor’s follow up report, the 

Company shall adopt and implement all recommendations in the report, provided, however, that as 

to any recommendation that the Company considers unduly burdensome, impractical, costly, or 

inconsistent with applicable law or regulation, the Company need not adopt that recommendation 

at that time, but may submit in writing to the Monitor and the Commission staff within fifteen (15) 

days of receiving the report, an alternative policy, procedure, or system designed to achieve the 

same objective or purpose. 

19. In the event the Company and the Monitor are unable to agree on an acceptable 

alternative proposal within fifteen (15) days, the Company shall promptly consult with the 

Commission staff.  Any disputes between the Company and the Monitor with respect to the 

recommendations shall be decided by the Commission staff in its sole discretion.  The 

Commission staff shall consider the Monitor’s recommendation and the Company’s reasons for 

not adopting the recommendation in determining whether the Company has fully complied with 



 

 26 

its obligations.  Pending such determination, the Company shall not be required to implement any 

contested recommendation(s).  The Monitor shall repeat the process of Follow-Up Reviews 

until the terms in paragraph 21 (Certification of Compliance) or paragraphs 24-25 (Termination 

 

or Extension of Monitorship) are met. 

 

20. Throughout the Term of the Monitorship, the Monitor shall disclose to the 

Commission staff any credible evidence that corrupt or otherwise suspicious transactions 

occurred, or payments of things of value were offered, promised, made or authorized by any 

entity or person within the Company, or any entity or person working directly or indirectly for or 

on behalf of the Company, or that related false books and records may have been maintained by 

or on behalf of the Company. The Monitor shall contemporaneously notify the Company’s 

Global General Counsel, Chief Compliance Officer, or Audit Committee for further action unless 

at the Monitor’s discretion he or she believes disclosure to the Company would be inappropriate 

under the circumstances. The Monitor shall address in his or her reports the appropriateness of 

the Company’s response to all improper activities, whether previously disclosed to the 

Commission staff or not. 

Certification of Compliance 

 

21.   At the conclusion of the ninety (90) calendar day period following the issuance of 

the second follow-up report, or later follow-up report if applicable, if the Monitor believes that 

the Company’s Policies and Procedures and FCPA compliance program are reasonably designed 

and implemented to detect and prevent violations of the Anti-corruption Laws and are 

functioning effectively, the Monitor shall certify the Company’s compliance with its compliance 

obligations under the Order. The Monitor shall then submit to the Commission staff a written 



 

 27 

report (“Certification Report”) within forty (40) calendar days. The Certification Report shall set 

forth an overview of the Company’s remediation efforts to date, including the implementation 

status of the Monitor’s recommendations, and an assessment of the sustainability of the 

Company’s remediation efforts.  The Certification Report should also recommend the scope of 

the Company’s future self-reporting.  Also at the conclusion of the ninety (90) calendar day 

period following the issuance of the second follow-up report, the Company shall certify in 

writing to the Commission staff, with a copy to the Monitor, that the Company has adopted and 

implemented all of the Monitor’s recommendations in the initial and follow-up report(s), or the 

agreed-upon alternatives. The Monitor or the Company may extend the time period for issuance 

of the Certification Report or the Company’s certification, respectively, with prior written 

approval of the Commission staff. 

Self-Reporting Period 

 

22.  At such time as the Commission staff approves the Certification Report and the 

Company’s certification, the monitorship shall be terminated, and the Company will be permitted 

to self-report to the Commission staff on its enhanced compliance obligations for the remainder 

of the term of the Order. The Commission staff, however, reserves the right to terminate the 

monitorship absent certification by the Monitor, upon a showing by the Company that 

termination is, nevertheless, in the interests of justice. 

23. If permitted to self-report to the Commission staff, the Company shall thereafter 

submit to the Commission staff a written Initial Self-Report and Follow Up Self-Report at six (6) 

month intervals, setting forth a complete description of its remediation efforts to date, its 

proposals to improve the Company’s Policies and Procedures and FCPA compliance program for 



 

 28 

ensuring compliance with the Anti-corruption Laws, and the proposed scope of the subsequent 

reviews. The Company shall disclose any credible evidence that corrupt or otherwise suspicious 

transactions occurred, or payments of things of value were offered, promised, or provided to 

foreign officials, that it learns of that occurred after the date of this Consent. The Company may 

extend the time period for issuance of the self-report with prior written approval of the 

Commission staff. 

Termination or Extension of the Monitorship 

 

24.  If at the conclusion of the ninety (90) calendar-day period following the issuance 

of the second follow-up report, or later follow-up report if applicable, the Commission staff 

concludes in its sole discretion that the Company has not by that time successfully satisfied its 

compliance obligations under the Order, the Term of the Monitorship shall be extended for 

twelve (12) months. Under such circumstances, the Monitor shall commence additional Follow-

Up Reviews in accordance with Paragraphs 16-19. 

25. If at the conclusion of the thirty-six (36) month period the Commission staff 

concludes the Company has not met its obligations under the Order, the Commission staff in its 

sole discretion may extend the Monitorship or Self-Reporting requirements up to forty-eight (48)  

 

months from the issuance of the Order, and require reporting as set forth for Follow-Up Reviews 

or Self-Reporting. 

Extensions of Time 

 

26.  Upon request by the Monitor or the Company, the Commission staff may extend 

any procedural time period set forth above for good cause shown. 



 

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Confidentiality of Reports 

27. The reports submitted by the Monitor and the periodic reviews and reports 

submitted by the Company will likely include confidential financial, proprietary, competitive 

business, or commercial information.  Public disclosure of the reports could discourage 

cooperation, impede pending or potential government investigations, or undermine the objective 

of the reporting requirement.  For these reasons, among others, the reports and the contents 

thereof are intended to remain and shall remain non-public, except (i) pursuant to court order, (ii) 

as agreed to by the parties in writing, (iii) to the extent that the Commission determines in its 

sole discretion that disclosure would be in furtherance of the Commission’s discharge of its 

duties and responsibilities, or (iv) as is otherwise required by law. 

Address for All Written Communications and Reports 

 
 28. All reports or other written communications by the Monitor or the Company 

directed to the Commission staff shall be transmitted to Tracy L. Price, FCPA Unit, Deputy Chief, 

Division of Enforcement, U.S. Securities and Exchange Commission, 100 F Street NE, 

Washington D.C. 20549.