Danish medtech company fined 100 million kroner in the US

BK Medical was involved in sham transactions

Danish medtech company BK Medical and its US owner Analogic Corporation, a leader for advanced imaging technologies, have agreed to pay about 100 million kroner to settle civil and criminal charges in the United States.

According to a statement from the US Securities and Exchange Commission (SEC), both Analogic and BK Medical were accused of issuing fake, inflated invoices to distributors and funnelling millions of dollars to third parties, including shell companies in Belize, Cyprus and Seychelles.

“BK Medical’s participation in these payment arrangements with its distributors created a significant risk that BK Medical was facilitating bribery or other prohibited conduct, such as embezzlement or tax evasion,” stated the SEC.

READ MORE: Danish tycoon lost 1.5 billion kroner in one day

Personally involved
Lars Frost, the chief financial officer at the Danish subsidiary, personally authorised about 150 such suspicious payments in the period from 2008 to 2011 and submitted false quarterly sub-certifications to Analogic, reported the SEC.

Frost has agreed to pay about 135,000 kroner penalty to settle the civic case against him.

Analogic, which is based in Peabody, Massachusetts, has agreed to pay 77 million kroner, while BK Medical, which has offices in Herlev, agreed to pay 23 million kroner.

In the financial year 2014/15, BK Medical, which produces ultrasound equipment, generated revenue of 382.8 million kroner but ended up with a loss of 47.5 million kroner.