AGCO to pay $1.6M
ATLANTA (AP) -- A Georgia-based international farming equipment manufacturer has agreed to pay $1.6 million for paying kickbacks to the former Iraqi government to secure United Nations oil-for-food contracts, the Justice Department announced Wednesday.
Federal prosecutors had charged the Duluth, Ga.-based AGCO -- which also has operations in Jackson -- with one count of conspiracy to commit wire fraud and conspiracy to violate record keeping provisions of the Foreign Corrupt Practices Act. However, the charges will be dropped after three years as long as the company cooperates with authorities, under the terms of the agreement.
According to the agreement, AGCO paid about $553,000 to the former government of Iraq to secure three contracts between 2000 and 2003. The contract prices were inflated by as much as 21 percent before they were submitted for U.N. approval. The U.N. then paid out the extra money to Agco, which was then used to pay kickbacks to the former Iraqi Ministry of Agriculture.
Debra Kuper, general counsel for Agco, said the company was pleased the matter was resolved. AGCO, which confirmed the agreement with the Justice Department, has since implemented a new compliance program to prevent similar problems, Kuper said.
Charges against AGCO will be dropped after three years as long as the company cooperates with authorities, the Justice Department said.
Agco also reached a settlement with the U.S. Securities and Exchange Commission, agreeing to pay a civil penalty of $2.4 million, and another approximately $16 million related to 16 oil-for-food contracts.
The international company was founded in 1990 and had $8.4 billion in sales in 2008.