Kuwaiti company indicted for fraud


A Kuwaiti company was indicted for overcharging the government on an $8.5 billion food service contract to feed troops in Iraq, Kuwait and Jordan, the Justice Department announced today.

The company, Public Warehousing Company (PWC), faces criminal charges of conspiracy to defraud the government, committing major fraud against the government, making false statements to the government, submitting false claims to the government and wire fraud. The allegations stem from a series of false invoices the company submitted to the Defense Department between 2003 and 2005.

According to Justice, the company conspired with unnamed suppliers to inflate prices by hiding overhead costs in the prices the suppliers charged PWC. The contract did not allow the company to bill for overhead. In addition, PWC failed to pass along discounts from suppliers to the government, as required by the contract.

The company faces a sentence of probation and a fine of twice the losses to the government on the criminal charges. In addition to the criminal case, the Justice Department also announced today that it joined a civil whistleblower suit against PWC; its subcontractor, The Sultan Center Food Products Company; and PWC’s chief executive officer Tarek Abbul Aziz Sultan Al-Essa. The government could collect triple the damages under the civil suit filed under the False Claims Act.

Both the civil and criminal allegations are still under investigation and case files remain under seal.


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