By Charles S. Clark
A major supplier of food and bottled water to U.S. military bases in Iraq and Afghanistan on Monday pleaded guilty to overcharging the Defense Logistics Agency by $48 million.
Supreme Food Service, whose parent company is based in the Netherlands, agreed to pay $434 million to settle criminal and civil charges for its handling of an $8.8 million contract that was terminated in 2013, according to news reports.
The case decided in U.S. District Court in Eastern Pennsylvania was brought in part by a whistleblower employed by the company, who will receive $16.2 million, plus $1.5 million for attorney’s fees and expenses, according to Bloomberg.
“We accept full responsibility for and deeply regret our past actions,” said a statement from Emma Sharma, general counsel for Supreme Group USA. “We have implemented new compliance mechanisms and strengthened our internal processes. We now have some of the most rigorous controls in the industry. We recognize that to re-earn trust, we must always act with integrity.”
The fraud came to light in part through congressional investigations and work by the bipartisan Commission on Wartime Contracting, which in February 2012 estimated that contractor fraud in Iraq and Afghanistan had cost the Defense Department $60 billion.
Congress’s probe was led by House Oversight and Government Reform Committee members Rep. Jason Chaffetz, R-Utah, and Rep. John Tierney, D-Mass. “Today’s guilty plea confirms the findings of our investigation over the past several years—that Supreme Foodservice engaged in illegal practices that cost U.S. taxpayers millions of dollars,” Tierney said on Monday. “This type of war profiteering is particularly contemptible, and I urge Chairman-elect Chaffetz to continue rooting out these abuses and protect against waste in Afghanistan and around the world.”
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