Share

Food supplier to US troops fined for fraud

Washington - The US government on Monday fined Supreme Group, one of the largest suppliers to US troops in Afghanistan, $434m for fraudulently overcharging the government for food and water.

The group, headquartered in Amsterdam and owned by American billionaire Stephen Orenstein, pleaded guilty to criminal charges and agreed to pay large fines as well to resolve civil suits in the case brought by the US Justice Department.

The charges said a Supreme Group Swiss subsidiary Supreme Foodservice GmbH, and a Dubai-based unit Supreme Foodservice FZE, came up with a scheme to fraudulently add to the profits provided in the group's $8.8bn contract to supply the US military in Afghanistan during 2005 to 2009.

"The companies fraudulently inflated the price charged for local market ready goods and bottled water sold to the United States," costing the government an extra $48m, the government said.

Internal emails between company executives cited by the government showed their "deliberate decision to inflate the prices," via an intermediary company in the United Arab Emirates, the Justice Department said.

It also said that in 2007 the company had paid off a fired executive who had threatened to tell the US military about the overcharging.

The two companies pleaded guilty to criminal charges of major fraud and will pay $288m in fines, restitution and refunds.

In the civil cases, Supreme Group will pay $101m to settle a "whistleblower" lawsuit filed by a former executive that accused the group of knowingly overcharging the government. Another $45m in fines where levied in specific overcharging cases.

"The civil resolutions and agreements reflect the Justice Department's continuing efforts to hold accountable contractors that have engaged in war profiteering," said Acting Assistant Attorney General Joyce Branda in a statement.

"The department will pursue contractors that knowingly seek taxpayer funds to which they are not entitled."

In a statement Supreme Group said it has tightened up internal compliance mechanisms to better control its operations in response to the charges.

"We accept full responsibility for and deeply regret our past actions," said Emma Sharma, the general counsel for Supreme Group USA.

"We recognize that to re-earn trust, we must always act with integrity."

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.2%
Platinum
908.50
+1.3%
Palladium
1,017.25
+1.5%
Gold
2,220.32
+1.2%
Silver
24.84
+0.8%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders