Former J&J Executive Dougall Won't Serve Jail Time for Bribes, Court Rules

A former employee at Johnson & Johnson’s U.K. unit who admitted to joining a scheme to pay bribes to Greek doctors had his prison sentence overturned in a ruling that may still limit the U.K. Serious Fraud Office’s ability to offer plea bargains.

The ruling today by the Court of Appeal in London overturns a 12-month prison term given to Robert John Dougall, 44, who agreed with Britain’s SFO to admit his role in the plot and help with the probe in exchange for avoiding jail.

Judges David Clarke and Lloyd Jones said Dougall should have his prison sentence suspended because he cooperated with authorities and didn’t profit from the scheme. They also said the SFO shouldn’t offer such deals to whistleblowers.

“A plea agreement or bargain between the prosecution and the defense, in which they agree what the sentence should be, or present what is in effect an agreed package for the court’s acquiescence, is contrary to principle,” the judges wrote in a 19-page decision.

The ruling is the second to challenge the SFO’s ability to offer plea bargains as it seeks to win court approval for a separate settlement with BAE Systems Plc in a fraud and bribery case. David Corker, a criminal defense lawyer at Corker Binning in London, said the ruling is a rebuke to the agency.

‘Profound Judicial Rejection’

“It’s a profound judicial rejection of any belief that it’s permissible, as part of a fight against white-collar crime, for the SFO to offer inducements concerning a light sentence,” said Corker, who isn’t involved in the case.

Another U.K. judge in March approved the SFO’s first plea bargain in an overseas corruption probe involving fuel-additives maker Innospec Inc., but said the agency shouldn’t make such deals in the future because it isn’t empowered to do so.

BAE in February had agreed to pay 30 million pounds ($44.1 million) to resolve the SFO probe. The SFO decided last month to seek court approval for the settlement, saying it didn’t believe the Innospec ruling affects the agreement with BAE.

Dougall’s lawyer, Shaul Brazil, said the court recognized the tactical value of cooperation and that his client’s successful appeal will still help investigators.

“I think this will be encouraging to the SFO and it will assist them in their attempt to persuade individuals to see the advantages of cooperating,” Brazil said today in an interview.

The agency charged Dougall in December and sought his cooperation in a wider investigation into the bribery scheme. Dougall, who became marketing director in 1999 and left the company in 2007, didn’t seek or gain any personal benefit from bribes, the SFO said.

Combined Voices

“The SFO combined its voice with that of the defense in saying that this case is one where a suspended sentence is appropriate,” SFO spokesman David Jones said in an e-mailed statement.

In today’s ruling, the judges cited findings that the 4.5 million-pound bribery scheme at the J&J unit, Leeds, England-based DePuy International, was under way when Dougall joined the firm.

Dougall admitted paying commissions in advance on sales made by Medec SA, a Greek distributor of the company’s orthopedic products. Some of the money was used to make “incentive payments” to persuade Greek surgeons to use DePuy’s products, the SFO said.

The “improper payments” were voluntarily disclosed by New Brunswick, New Jersey-based J&J in 2007 to the U.S. Department of Justice and the Securities and Exchange Commission, the company said last month.

To contact the reporter on this story: Erik Larson in London at elarson4@bloomberg.net.

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