Analogic to pay $15m to settle SEC charges over BK Medical ‘slush fund’

The U.S. Securities & Exchange Commission said today that Analogic (NSDQ:ALOG) agreed to pony up $15 million to settle civil and criminal charges brought over violations of the Foreign Corrupt Practices Act. The SEC said Peabody, Mass.-based Analogic’s Danish subsidiary, BK Medical, ran hundreds of sham transactions with distributors to funnel some $20 million to 3rd parties, “including individuals in Russia and apparent shell companies in Belize, the British Virgin Islands, Cyprus, and Seychelles.” Led by former BK Medical CFO Lars Frost, the Danish unit would issue fake, inflated invoices to the distributors and send the overages to 3rd parties tagged by the distributors. “BK Medical did not have a relationship with the third parties and did not know if the payments had any business purpose,” according to the securities watchdog. BK Medical’s Russian distributor accounted for at least 180 payments of more than $16 million, the SEC said, with its distributors in Ghana, Israel, Kazakhstan, Ukraine and Vietnam also participating but on a smaller scale – a total of 80 payments worth $3.8 million. Frost, BK Medical’s CFO from 2008 to 2011, personally approved about 150 of the faked invoices and cooked the books he submitted to Analogic. He agreed to cough up a $20,000 penalty to the SEC but admitted no wrongdoing. For its part, Analogic – which discovered the violations and volunteered them to U.S.and Danish authorities – a...
Source: Mass Device - Category: Medical Equipment Authors: Tags: Legal News Wall Street Beat Analogic Corp. BK Medical Dept. of Justice (DOJ) Foreign Corrupt Practices Act Securities & Exchange Commission (SEC) Source Type: news