The SEC announced today that it has filed a settled enforcement action under the Foreign Corrupt Practices Act against AGCO Corp. The SEC alleges that from 2000 through 2003, certain AGCO subsidiaries made approximately $5.9 million in kickback payments in connection with their sales of equipment to Iraq under the United Nations Oil for Food Program (the “Program”). The kickbacks were characterized as “after sales service fees” (“ASSFs”), but no bona fide services were performed, the SEC alleges.
The SEC claims that AGCO failed to maintain an adequate system of internal controls to detect and prevent the payments and AGCO’s accounting for these transactions failed properly to record the nature of the payments.
AGCO has agreed to disgorge $13,907,393 in profits, plus $2,000,000 in pre-judgment interest and a civil penalty of $2,400,000. AGCO will also pay a $1,600,000 penalty pursuant to a deferred prosecution agreement with the U.S. Department of Justice, Fraud Section.
