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Fresenius Hit With Record Criminal Fines

Boston Fresenius Medical Care North America will pay a record $486 million in criminal and civil fines after pleading guilty to charges of fraud and conspiracy involving its National Medical Care subsidiary and three of its subsidiaries.

The Fresenius plea caps what First Assistant U.S. Attorney Mark Pearlstein called a "massive five-year investigation."

The NMC subsidiaries-NMC Homecare Inc., LifeChem Inc. and NMC Medical Products-made hundreds of thousands of fraudulent claims to the United States government and violated the Medicare Anti-Kickback Act. The criminal conduct, company officials said, occurred before the corporate reorganization of Bad Homburg, Germany-based Fresenius AG and W.R. Grace & Co., which resulted in the formation of Fresenius Medical Care North America. Some of the improprieties date back to May 1987.

Criminal fines total $101 million; civil fines total $385 million. Fresenius has also entered into an eight-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services. Government officials said it was the largest of this type of agreement in history.

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