Military Supplier Pays $389 Million for ‘War Profiteering’

PHILADELPHIA (The Philadelphia Inquirer/TNS) -

An overseas supplier of food and water to U.S. troops in Afghanistan on Monday pleaded guilty in what a federal prosecutor called a case of “war profiteering,” and paid $389 million in fines, damages and penalties.

From July 2005 until April 2009, Supreme Foodservice GmbH and an affiliated company in the United Arab Emirates overcharged the U.S. military by $48 million for water and fresh fruit and vegetables delivered to bases in Afghanistan, according to charges by the U.S. attorney for the Eastern District of Pennsylvania.

The scheme worked through a third affiliated company, called Jamal Ahli Foods Co. LLC, which was set up solely to add an extra layer of profit on the supplies sold by Supreme.

Supreme’s owners are based in the United Arab Emirates, but the company is incorporated in Switzerland.

“We regard their crimes as the worst sort of war profiteering,” Bea Witzleben, the Assistant U.S. attorney who prosecuted the case, told U.S. District Court Judge Gene E.K. Pratter during Monday’s hearing, which covered both the plea and the sentencing.

The United Arab Emirates does not have an extradition treaty with the United States, making it impossible for the owners to stand trial and face possible jail time, Witzleben said in court.

Instead, Supreme will be on probation for five years and its unidentified owners will be prohibited from doing business with the federal government during that time.

The case was prosecuted in Philadelphia because the Defense Logistics Agency Troop Support, formerly known as the Defense Supply Center Philadelphia, which administers contracts to supply the armed services with food, water and other essentials, is in the city.

The $389 million included $101 million to settle a whistleblower lawsuit. That settlement was unsealed Monday.