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The War Profiteers - War Crimes,
Kidnappings & Torture |
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November 16th,
2009 - Kuwaiti Contractor Accused of Bilking Army |
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Kuwaiti Contractor
Accused of Bilking Army By Guillermo Contreras San Antonio Express-News November 16, 2009 A Kuwaiti company that was
the primary provider of food for American troops during the war in Iraq was
indicted Monday on charges that it overcharged the U.S. more than $68
million, although a related civil lawsuit says the fraud exceeded $1 billion. Public Warehousing Co., now
known as Agility, was indicted by a federal grand jury in Atlanta based
partly on allegations in the suit filed by a whistleblower, Kamal Mustafa
Al-Sultan, whose own company appears to have offered a $40,000 bribe to
now-former Army Maj. John L. Cockerham of San Antonio. Cockerham, who admitted
taking $9.6 million in bribes from various companies and expected another
$5.4 million, was scheduled for sentencing today in San Antonio, but it has
been postponed until Dec. 2. Officials have referred to
Cockerham's case as the largest American bribery investigation the Iraq
reconstruction produced. The case spun from intertwined probes that resulted
in the bizarre deaths of at least two military contracting officers, among
them Army Lt. Col. Marshall Gutierrez, who died from ingesting antifreeze
after questioning Public Warehousing's charges. The six-count indictment
charges Public Warehousing (also called PWC) and unidentified co-conspirators
with conspiracy to defraud the United States, major fraud and wire fraud. Company executives were not
charged, but prosecutors said the case remains under investigation. PWC
officials, who have previously said PWC was cooperating with the Justice
Department and denied any wrongdoing, could not be reached for comment. “This indictment is the
result of a multiyear probe into abuses in vendor contracts in the Middle
East involving the illegal inflation of prices in contracts to feed our
troops,” said F. Gentry Shelnutt, acting U.S. attorney in Atlanta, where the
civil suit also was filed in 2005. “Others who have engaged in
similar conduct should beware,” he said. “This indictment is only the first
step. Our investigation of entities and persons who have defrauded the United
States and our military is ongoing.” The indictment alleges PWC
was awarded “prime vendor” contracts to provide food and other items to the
U.S. military in Iraq, Kuwait and Jordan between 2003 and 2005 and was paid
more than $8.5 billion, but intentionally failed to buy less-expensive food
items, used formulas that allowed for overbilling, and manipulated and
inflated prices of delivered products. Al-Sultan stands to gain
millions of dollars if he wins the lawsuit that, in part, alerted American
authorities to the alleged fraud, though officials said there were other
investigative leads that led to the criminal indictment. Al-Sultan's suit, also known
as a qui-tam action, recently was unsealed. Such litigation can stay sealed
for years while the government investigates and decides whether to join the
case, and if the plaintiffs win, the whistleblower can get about 15 percent
of what the government recovers. The Justice Department
joined the suit, but declined in 2007 to join a similar suit filed in 2006 by
another contractor, Iowa businesswoman Beth A. Hanken, who accused Public
Warehousing of the same type of fraud. Al-Sultan's lawsuit names as
defendants Public Warehousing and some of its subsidiaries, and company
officials Tarek Abdul Aziz Sultan Al-Essa, Charles Tobias Switzer and Emad Al
Saleh. Ironically, Al-Sultan's
company, KMSCO, was accused by the Army in 2004 of stealing fuel it was
supposed to provide for troops, but settled the matter by paying a $500,000
penalty, the Express-News reported. The company also appears on
a ledger outlining bribes Cockerham had received or aimed to collect for
steering bottled-water contracts to handpicked firms. KMSCO, however,
continues to receive multi-million dollar contracts, U.S. military records
show. External link: http://www.mysanantonio.com/news/70251742.html |