Defense food provider indicted for fraud

Nov. 16, 2009 at 2:45 PM
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WASHINGTON, Nov. 16 (UPI) -- A Kuwaiti logistics company Monday was indicted by a federal grand jury in Atlanta on charges of overcharging for food to feed U.S. troops.

In the indictment, Public Warehousing Co. was accused of committing major fraud, making false statements, submitting false claims and wire fraud in multi-billion-dollar Pentagon contracts to feed U.S. troops in Iraq, Kuwait and Jordan, the U.S. Justice Department said in a release.

A civil suit also has been filed against PWC.

The six-count indictment claimed PWC was awarded three prime vendor contracts to provide food and other items to military customers in the Middle East, the Justice Department said. PWC was paid more than $8.5 billion for the contracts.

Among other things, the indictment alleged PWC conspired with other unidentified entities to file false statements and invoices to the Defense Supply Center Philadelphia -- a troop support center of the Defense Logistics Agency -- manipulating and inflating delivery prices, failing to provide lowest-priced items, overbilling, and changing items' packaging so more items could be billed.

"This indictment is the result of a multi-year probe into abuses in vendor contracts in the Middle East involving the illegal inflation of prices in contracts to feed our troops," the acting U.S. Attorney on the case, F. Gentry Shelnutt, said. "Others who have engaged in similar conduct should beware. This indictment is only the first step. Our investigation of entities and persons who have defrauded the United States and our military is ongoing."

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