New Fraud Suit Re Iraq Military Contracts

Bloomberg reports that U.S. prosecutors have filed a civil suit against Kuwaiti logistics company Agility, accusing it of defrauding the government over food contracts to the U.S. military in the Middle East worth $9.8 billion.

Agility was the largest supplier to the U.S. Army in the Middle East during the war in Iraq and a parallel criminal case is politically sensitive in both Washington and Kuwait.

The government aims to “recover all available damages for common law fraud, payment under mistake of fact, unjust enrichment and breach of contract,” said the suit filed on Wednesday.

The suit alleges that starting in 2003, Public Warehousing Company K.S.C., also known as Agility, engaged in two schemes to present false claims for payment. It also names The Sultan Center Food Products Company as a defendant.

In the first scheme, the company falsely inflated prices for perishable items and local market ready items, the suit said, and in the second scheme, it overcharged the government by failing to disclose discounts it received.

Agility has long argued that it regards the entire case as a contract dispute that should be settled through negotiation.

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