Agility Public Warehousing pays $95 million to settle claims alleging fraudulent billing for food to U.S. Troops in Kuwait

Agility Public Warehousing Co. KSC (Agility), a Kuwaiti company, has agreed to Pay $95 million to settle  criminal, civil, and administrative cases arising from allegations that Agility overcharged the United States for food supply food for U.S. troops from 2003 through 2010.

The civil claims and criminal charges arose from allegations originally raised in a civil whistleblower suit against Agility and another Kuwaiti company, The Sultan Center Food Products Company, K.S.C. (TSC). Kamal Mustafa Al-Sultan, a former vendor of Agility, filed the lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act (FCA), which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Al-Sultan will receive $38.85 million as a result of the civil action he filed, which is captioned U.S. ex rel. Kamal Mustafa Al-Sultan v. Agility Public Warehousing Co., K.S.C. et al., No 1:05-cv-2968-GET (N.D. Ga.). The whistleblower was represented by the firm Moss & Gilmore LLP.

In its complaint, the United States alleged that Agility and TSC knowingly overcharged the Department of Defense for locally available fresh fruits and vegetables that Agility purchased through TSC, and falsely charged the full amount of TSC’s invoices despite agreeing that Agility would pay 10 percent less than the amount billed. The United States also alleged that Agility failed to disclose and pass through rebates and discounts it obtained from U.S.-based suppliers, as required by its contracts.

Following Agility’s criminal Indictment by a grand jury, on Nov. 16, 2009, DLA suspended Agility from government contracting due to the criminal Indictment. This suspension was subsequently extended to Agility’s more than 300 affiliated entities. As a result, Agility and its affiliates have forgone the opportunity to obtain billions of dollars in revenue associated with DOD contracts since 2009. Although Agility’s suspension will be lifted, it will be required to use an independent monitor. Moreover, the agreement requires Agility to maintain an ethics and compliance program with a number of detailed requirements.

Jeffrey Newman represents whistleblowers but not the whistleblower in this case.