First British executive jailed for corrupting foreign officials

The first British executive convicted of corrupting foreign officials to land contracts was today jailed for a year. John Dougall, 44, a senior marketing executive for a medical products firm, pleaded guilty to conspiring to channel bribes of more than £4.5m to Greek surgeons. Mr Justice Bean jailed Dougall even though prosecutors from the Serious Fraud Office (SFO) argued he deserved a lighter

sentence as he had been a valuable witness in the case, the first of its kind in an overseas corruption prosecution. Dougall turned over many documents to the SFO prosecutors to help break open the case, and promised to testify in any future trials against other individuals. 

The judge said that the public would expect an individual involved in “substantial and long-term” corruption to be jailed immediately rather than be given a suspended sentence, as the SFO and his defence had recommended. 

He noted that former UN secretary general Kofi Annan has said corruption was an “insidious plague” and “evil phenomenon”, that was an “element in economic underperformance”. 

The conviction of an individual breaks new ground, as the SFO seeks to show it is cracking down on the payment of bribes to politicians and officials overseas by British companies, in the pursuit of export orders. Britain has been accused for years of ignoring this kind of corruption. The SFO has also begun prosecuting corporate entities recently.

Today, Southwark crown court heard executives at the Leeds-based firm, DePuy, paid the bribes to Greek surgeons as inducements to land contacts worth nearly £20m, between 2002 and 2005. 

John Kelsey-Fry, QC for the SFO, said DePuy executives funnelled the bribes through a Greek middleman, via an Isle of Man company.

The surgeons had substantial influence in choosing which firms’ products should be bought.

The payments, through the middleman – named in court as Nikolaos Karagiannis and his company Medec – were referred to as payments for “professional education”, he said. 

But in effect, the money went into a “black hole” and was used for corrupt cash incentives to doctors and to send them on “vanity meetings”, including a holiday to South Africa. 

He added that the bribes were concealed by inflating the value of the sales by 20%. The prices of the products in Greece were twice the European average. 

“There is no doubt one of the reasons why the prices were so high in Greece is that the market was corrupt. The losers therefore were the Greek taxpayers”. 

Dougall, who earned nearly £100,000 a year, told investigators he considered the payments “distasteful” but felt he did not have any choice. 

Kelsey-Fry said: “It was his seniors who were clearly consenting and driving the activity.” 

Following representations from the media, the judge lifted a ban proposed by the SFO, on reporting the names of two DePuy executives who were alleged to have also conspired to make the corrupt payments. They are Michael Dormer and Gary Fitzpatrick. 

Dougall, of Wynyard, Billingham, was given permission to appeal against the sentence. 

The SFO has encouraged those involved in corruption to co-operate with their investigations, in return for more lenient sentences.