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United States v. Iveco S.p.A.

 
:
Fiat - Iveco S.p.A.
:
DOJ Criminal
:
December 22, 2008
:
United States v. Iveco S.p.A.
:
U.S. v. IVECO S.p.A. (D.D.C. 2008)
:
Automotive
:
Iraq
:
2000; 2001; 2002
:
Iraq government, including Ministry of Irrigation, Commission of Electricity, Ministry of Housing and Construction, and Ministry of Oil.
:
In April 1995, the U.N. adopted Security Council Resolution 986, which permitted the government of Iraq to sell oil and to use proceeds from those sales to purchase humanitarian supplies such as food for the Iraqi people ("U.N. Oil for Food Program"). In an extensive scheme, the Iraqi government received illicit payments in the form of surcharges from oil purchasers and kickbacks, often termed "after sales service fees," from humanitarian goods suppliers. The kickback payments were masked by inflating the contract price, usually by approximately 10% of the contract value, though in this case sometimes as high as 15%.
Iveco S.p.A. ("Iveco"), a wholly-owned subsidiary of Fiat S.p.A. ("Fiat"), is an international manufacturer and supplier of commercial trucks, parts, and diesel engines. Between October 2000 and June 2001, Iveco, through an unnamed Lebanese company acting as agent and distributor and an unnamed United Arab Emirates company acting as a conduit for payments to the Iraqi government, was awarded sixteen contracts worth approximately €31.9 million to supply Iveco trucks and parts to the Republic of Iraq. To obtain these contracts, Iveco, through the agent and distributor and the conduit, paid approximately $3.17 million in kickbacks to the Government of Iraq.

Iveco improperly characterized payments to the agent and distributor, some of which were paid as kickbacks to the Iraqi government, as "service and commission payments." At the end of the fiscal year 2002, Iveco's books and records, including those containing false characterizations of the kickbacks paid to the Iraqi government, were incorporated into the books and records of Fiat for purposes of preparing Fiat's year-end financial statements.

As in the majority of Oil for Food cases, the government did not allege any improper payments to any individual foreign officials.
:
Conspiracy - Books & Records
:
Wire Fraud
:
Subject to Deferred-prosecution Agreement
:
Monetary payment of $7,000,000 to be paid by Fiat S.p.A. on behalf of Italia S.p.A., CNH Italia S.p.A., and CNH France S.A.
:
Not stated.
:
0
:
Issuer
:
Foreign
:
Contract Procurement/Retention
:
41,000,000
:
Wire/check
:
Sales Agent/Consultant
:
3,170,000
:
No