Top Food Supplier to (US)Military Indicted
By MIKE ESTERL
ATLANTA — The U.S. government filed a criminal indictment against a Kuwaiti company that is the leading food supplier to the American military in Iraq, in what prosecutors described as the first step in a broader investigation.
The Department of Justice on Monday declined to estimate the scope of the alleged fraud by Kuwait-based Public Warehousing Co. K.S.C., but it said in a statement that it believed the amount to be massive. PWC has received more than $8.5 billion in food-supply contracts for U.S. military personnel in Iraq, Kuwait and Jordan dating back to 2003, the DOJ said.
PWC, which rebranded itself as Agility in 2006 and continues to supply food to U.S. troops, said in a statement that it was confident the U.S. government allegations “will be found to be without merit.” PWC is “surprised and disappointed” by the indictment, it said.
Barbara Nelan, assistant U.S. attorney for the Northern District of Georgia, told reporters that the indictment against PWC was “the first step” in a broader investigation of individuals and other companies that may have participated in the alleged fraud.
The criminal indictment by a federal grand jury was filed under seal last week in the U.S. District Court for the Northern District of Georgia. Prosecutors on Monday said it was triggered in part by a whistle-blower civil suit filed with the same court by Kamal Mustafa Al-Sultan in November 2005.
Mr. Mustafa Al-Sultan, a former business partner of PWC, alleged in an amended civil suit against PWC in U.S. District Court in Atlanta last month that the Kuwaiti logistics company has defrauded the U.S. government of more than $1 billion by marking up prices by 30% or more.
The DOJ alleges that Sulaibiya, Kuwait-based PWC provided “false invoices and statements” to the Defense Supply Center Philadelphia, a branch of the Department of Defense that gives logistical support to U.S. troops. It says PWC used various tactics to artificially inflate bills and retain “product rebates, allowances and discounts” that should have gone to the U.S. government.
Among other allegations, prosecutors say PWC conspired with Kuwaiti subcontractor The Sultan Center Food Products Co. KSC — known as T.S.C. — to charge the U.S. above-retail prices for fresh fruit and vegetables. It alleges that T.S.C. then paid kickbacks to PWC in the form of a 10% rebate.
PWC received $62.3 million in such rebates from T.S.C. during the first 41 months of food-supply contracts with the U.S. military, the DOJ alleges. That figure doesn’t include an undisclosed amount of rebates spanning another 35 months of supply contracts between the parties, prosecutors said in the indictment, which was made public on Monday. T.S.C. didn’t return calls seeking comment.
In another case, prosecutors allege that PWC overcharged for food by persuading an unnamed Georgia-based supplier to reduce the pack sizes of products it sold by half so that PWC could bill the U.S. military twice as much.
The Department of Defense said that it has suspended PWC from bidding for contracts during the legal proceedings. The suspension doesn’t preclude PWC from completing its current contracts.
Prosecutors said they hoped to claim as much as two times the money that PWC gained from the food-supply contracts or two times the estimated loss to the U.S.
—Brent Kendall and Yochi Dreazen in Washington contributed to this article. (click HERE for original article)
According to yesterdays article (click HERE) it stated:
“The largest shareholder of its parent company – named Khalid Sultan – has been linked to the terrorist organization Revival of the Islamic Heritage Society known as RIHS; he also acts as the leader of the Islamic Salaf Alliance, the political arm of RIHS. RIHS has been designated by US Treasury as a terrorist organization,” CBS News’ Investigative Team reports.
PWC/Agility’s Response to the allegations
Gosh it sounds as though a certain “Spokeswoman” (Heather Browne) has been cloned, doesn’t it? Maybe she is moon lighting.
Statement by Public Warehousing Co. (PWC) Concerning Indictment Announcement
WASHINGTON, Nov. 16 /PRNewswire-USNewswire/ — PWC has for some time worked with the government to seek a mutually agreeable resolution to this contract dispute and is surprised and disappointed that the government has decided to take this action.
The company has been the principal food supplier for the U.S. military in Kuwait and Iraq since 2003. The prices it charges have been negotiated with, agreed to, and continually approved as by the U.S. government since then. The government has consistently found PWC’s prices to be fair and reasonable.
Since 2006, the company’s “fill rates” – the number of cases of food accepted compared with the number ordered – were consistently more than 99 percent, a number that exceeds the fill rates of U.S. domestic service providers. That means that PWC was more successful in delivering food and other items to the military in a hostile war zone than other vendors have been within the safe environs of the continental U.S.
The company has long cooperated with government reviews, inspections, audits and inquiries necessary to ensure taxpayer dollars are being spent appropriately.
More than 30 PWC employees have been killed and 200 injured carrying out the extremely dangerous work of providing food for U.S. troops in a war zone, primarily in attacks on convoys that have destroyed more than 300 trucks and damaged another 700.
An indictment is merely an allegation. PWC is confident that once these allegations are examined in court, they will be found to be without merit.
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By: Mike Allen
