The Broad Reach Of The FCA: Feds Sue Kuwait-Based Companies That Supplied Food To U.S. Troops In The Middle East

We continue to publish articles in the Financial Fraud Law Report about the broad scope of the False Claims Act. Now, we have another example to mention to hit the point home: The U.S. government announced today that it has joined a whistleblower suit against Public Warehousing Company (PWC), The Sultan Center Food Products Company (TSC), and PWC’s chief executive officer, Tarek Abbul Aziz Sultan Al-Essa. 

The lawsuit alleges that since 2003, the defendants have violated the False Claims Act by presenting or causing others to present false claims for payment under PWC’s multi-billion contracts with the Defense Logistics Agency to supply food for U.S. service members serving in Kuwait, Iraq and Jordan. The complaint alleges that the defendants knowingly overcharged the United States for locally available fresh fruits and vegetables that PWC purchased through TSC. The complaint also alleges that PWC failed to disclose and pass through rebates and discounts it obtained from its U.S.-based suppliers, as required by its contracts.
 
The case was initially filed under seal by Kamal Mustafa Al-Sultan, the owner of a Kuwaiti company that originally partnered with PWC to submit a proposal on the food supply contracts. The case remained under seal to permit the United States to investigate the allegations and determine whether it would join the lawsuit. Under the False Claims Act, the United States may recover three times the amount of its losses, plus civil penalties.
 
"The decision to join in this civil lawsuit follows a multi-year probe into abuses in Middle East subsistence prime vendor contracts," said Acting U.S. Attorney F. Gentry Shelnutt. "This Office and the Department of Justice will spare no effort in investigating those persons and companies, regardless of location, who seek to defraud the United States."
 
"Regardless of location." That’s a broad mandate.