promoting, distributing or in any way marketing in Brazil the products
made by Biomet."
25. Despite this prohibition, from in or around 2009 until in or around 2013,
Biomet continued to use Brazilian Distributor and one of his affiliated
companies, Brazilian Distributor Company B, and knowingly and willfully failed
to implement additional controls to ensure that Brazilian Distributor and
Brazilian Distributor Company B would not pay bribes or maintain its affiliation
with Brazilian Distributor.
A-6
26. In or around 2009, Biomet, through Biomet International, began using
Brazilian Distributor Company B to distribute its products in Brazil. On or
about December 17, 2009, one of Biomet's internal auditors sent an email to
Biomet Executive stating that "I am working on a draft report [regarding
Brazilian Distributor Company B and two other companies] . . . The relationship
between [Brazilian Distributor Company A] and [Brazilian Distributor Company B]
is unclear and did not leave us with a high level of comfort." At or around the
same time, the internal auditor in charge of the review prepared a draft
internal audit memorandum summarizing his findings and recommendations. That
memorandum noted that Brazilian Distributor was a "main shareholder" of
Brazilian Distributor Company A and was responsible for paying bribes to sell
Biomet's products in the past. The memorandum recommended that Brazilian
'Distributor Company B terminate its relationship with Brazilian Distributor
Company A.
27. Biomet executives involved in developing, approving, and implementing
Biomet's internal accounting controls and anti-corruption program, including
Biomet Executive, knew that Biomet was not implementing the internal accounting
controls, policies, and procedures that Biomet approved to prevent or detect
bribery of foreign officials.
28. For example, on or about January 7, 2010, Biomet Executive received a draft
version of the memorandum discussed above in Paragraph 26, which recommended
that Biomet ensure that "the relationship between [Brazilian Distributor Company
A and Brazilian Distributor Company B] is separated completely." Biomet
Executive deleted that recommendation from the memorandum and, as a result, the
final version of the memorandum, did not include the recommendation that
Brazilian Distributor Company A and Brazilian Distributor Company B separate
their relationship.
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29. On or about April 30, 2010, Biomet learned that Brazilian Distributor was
not only affiliated with Brazilian Distributor Company B, but had control of
Brazilian Distributor Company B, which marketed and sold Biomet's products. On
that day, an attorney representing a co-owner of Brazilian Distributor Company B
contacted Biomet Executive and other Biomet International executives and
reported that the co-owner had lost control of Brazilian Distributor Company B
to Brazilian Distributor. As a result of learning this, Biomet Executive
contacted an attorney representing Brazilian Distributor and asked for more
information about Brazilian Distributor's relationship with Brazilian
Distributor Company B. Brazilian Distributor's attorney told Biomet Executive
that Brazilian Distributor was not involved in Brazilian Distributor Company B's
operations or with the sale of Biomet's products. Biomet Executive did not take
any other actions to determine whether Brazilian Distributor had a role in
Brazilian Distributor Company B.