The settlement further covers kickbacks J&J allegedly paid to physicians and pharmacies for prescribing and promoting those drugs.
"This global settlement resolves multiple investigations involving the antipsychotic drugs Risperdal and Invega -- as well as the heart drug Natrecor and other Johnson & Johnson products," Attorney General Eric Holder said in a statement.
"The settlement also addresses allegations of conduct that recklessly put at risk the health of some of the most vulnerable members of our society -- including young children, the elderly, and the disabled."
J&J is to pay $485 million in criminal fines and forfeiture and a total of $1.72 billion in civil settlements with the federal government and states.
The government charged that J&J unit Janssen Pharmaceuticals had promoted Risperdal without FDA approval for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients.
Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen's guilty plea requires approval by the US district court.
In separately filed civil complaints, the government alleged that J&J and Janssen promoted Risperdal and Invega to doctors -- and to nursing homes -- as a way to control behavioral disturbances in elderly dementia patients, children, and the mentally disabled.