AGCO Corp., Kickback Scheme, Georgia 2003

AGCO Corp., a U.S. corporation based in Duluth, Ga., has agreed to pay a $1.6 million penalty for illegal kickbacks paid to the former government of Iraq, Assistant Attorney General of the Criminal Division Lanny A. Breuer announced today.

The matter is part of the ongoing investigation into the United Nations (U.N.) Oil-for-Food Program. A criminal information was filed today against AGCO’s wholly owned U.K. subsidiary, AGCO Ltd., in U.S. District Court for the District of Columbia, charging AGCO Ltd. with one count of conspiracy to commit wire fraud and to violate the books and records provisions of the Foreign Corrupt Practices Act.

AGCO, an international manufacturer of agricultural machinery and equipment, has acknowledged responsibility for improper payments made by its subsidiaries’ officers, employees and agents to the former government of Iraq in order to obtain contracts with the Iraqi Ministry of Agriculture to sell agricultural equipment and parts.

According to the agreement and the information, between 2000 and 2003, AGCO Ltd. paid approximately $553,000 to the former government of Iraq to secure three contracts by inflating the price of the contracts by 13 to 21 percent before submitting the contracts to the U.N. for approval. The company concealed from the U.N. that the price of the contracts had been inflated and then used the additional funds to pay a kickback to the former Iraqi Ministry of Agriculture.

The deferred prosecution agreement requires that AGCO and its subsidiaries, including AGCO Ltd., cooperate fully with the Justice Department’s ongoing investigation.

AGCO will pay a combined total of more than $20 million in fines, penalties, and disgorgement of profits in connection with the cases brought by the Department of Justice, the SEC and the Danish State Prosecutor’s Office.

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