Ingineers Ramblings

US Attorney: Scammed While Feeding Troops

A logistics and warehousing company is in hot water for allegedly overcharging taxpayers tens of millions of dollars for feeding US Troops in Iraq, Afghanistan and Jordan. The United States Attorney announced a six count indictment against Kuwait-based Public Warehousing Company (PWC Logistics) at a press conference in Atlanta today. PWC, which changed their name to Agility in 2006, is a Department of Defense contractor. According to the 60 page indictment obtained by Fox News, PWC is accused of making false statements, submitting false claims and wire fraud. Investigators estimate the loss to U.S. taxpayers exceed $65 Million so far, but expect that number to grow as the investigation continues.

“This indictment is only the first step needed to address the fraud that has led to the massive overcharging of the United States,” said Acting US Attorney Gentry Shelnutt. “This office and the federal investigative agencies have dedicated ourselves to continue to pursue related serious allegations of fraud and abuse.”

The government paid PWC more than $8.5 Billion in defense contracts for supplying food to troops on the ground in the Middle East since 2003. But investigators say they discovered the company was overcharging for food and services by hiding discounts, concealing rebates and marking up the cost of food above retail prices in local markets. According to US contracts, vendors are required to pass along any rebates or discount savings to the US Government, something they say PWC intentionally failed to do.

Assistant U.S. Attorney Barbara Nelan said that PWC initially submitted false invoices and grossly undervalued quotes during the bidding process to win the contract. But federal investigators didn’t start looking into the companies actions until a civil lawsuit was filed in 2005 and someone tipped them off to the alleged overbilling.

Amazingly, despite on-going criminal investigations and today’s fraud indictments, PWC still has contracts with the government through the end of next year. Nelan and Shelnutt referred questions about PWC’s on-going defense contracts to the Department of Defense, saying it is out of their reach.

“What happens on the civil side of contracting with PWC is really beyond the scope of the criminal indictment,” Nelan says. “It is not something we are concerned with, we are just concerned with the criminal.”

A representative of the company will make an initial appearance in Federal Court in Atlanta to answer the charges on Friday.

PWC released a statement this afternoon saying "the prices it charges have been negotiated with, agreed to, and continually approved as by the U.S. government ... The government has consistently found PWC's prices to be fair and reasonable." The statement went on to say that an indictment is an allegation and they are confident the US Attorney's charges will be found to be without merit.

Labels: contractor fraud, taxpayer

# posted by Ingineer66 @ 11/17/2009 10:35:00 PM