Firms plead guilty to overbilling for food, water for troops in Afghanistan

WASHINGTON, Dec. 15 (UPI) -- Two foreign companies have pleaded guilty in court to defrauding the U.S. government by overcharging for food and water for U.S. troops in Afghanistan.

Supreme Foodservice GmbH, a privately held Swiss company, and Supreme Foodservice FZE, a United Arab Emirates company, entered the plea in U.S. District Court in Pennsylvania and paid a fine of $288.6 million, the Justice Department reported.

Supreme Group B.V. and a number of its subsidiaries also agreed to pay an additional $146 million to settle civil lawsuits – including a whistleblower lawsuit in Virginia -- involving alleged "false billings to the Department of Defense for fuel and transporting cargo to American soldiers in Afghanistan."

"These companies chose to commit their fraud in connection with a contract to supply food and water to our nation's fighting men and women serving in Afghanistan," said U.S. Attorney Zane David Memeger for the eastern district of Pennsylvania. "That kind of conduct is repugnant, and we will use every available resource to punish such illegal war profiteering."

According to court documents, Supreme Foodservice AG, together with Supreme Foodservice KG -- now called Supreme Foodservice FZE -- "devised and implemented a scheme" to overcharge the United States between July 2005 and April 2009. The companies, which had received an $8.8 million contract for their services, fraudulently inflated the price charged for local market ready goods (LMR) and bottled water sold to the United States under the contract.

The Supreme companies did this by using a UAE company it controlled, Jamal Ahli Foods Co. LLC (JAFCO), as a middleman to mark up prices for fresh fruits and vegetables and other locally produced products and to obscure the inflated price the Supreme companies were charging for bottled water.

The fraud resulted in a loss to the U.S. government of $48 million.