Your Call Is Confidential
Call Us Today (202) 973-0900

News

Iraq War Contractor Pays $95 Million to Settle Allegations by False Claims Act Whistleblower

Agility Public Warehousing Co. KSC, a Kuwaiti defense contractor, has agreed to pay $95 million to settle a False Claims Act lawsuit related to allegations that it overcharged the U.S. government on billions of dollars in Iraq War food supply contracts. The settlement, if it is approved by the court, will mark the end of more than a decade of litigation and investigation by qui tam attorneys and numerous federal agencies such as the Department of Justice, Defense Criminal Investigative Service, U.S. Army’s Criminal Investigative Command’s MPFU, and the FBI.

The civil case against Agility began over a decade ago due to the efforts of corporate whistleblower Kamal Mustafa Al Sultan — a former business partner of Agility. The Department of Justice noted that, if the agreement is approved by the court, Mr. Al Sultan will receive $38.5 million for the role he played in the case.

Agility entered into $8.5 billion in contracts with the U.S. Department of Defense to supply food to U.S. troops in Iraq, Kuwait and Jordan between 2003 and 2010. During this time, Agility is alleged to have knowingly overcharged DOD for fruits and vegetables and to have misrepresented its costs. Agility also allegedly violated its contract by using savings and discounts from U.S. suppliers without disclosing their lower costs or passing them on to the government. In addition to a $95 million-dollar payment, Agility has committed to maintain a corporate ethics and compliance program and be overseen by an independent corporate monitor. Agility has not admitted to any wrongdoing in connection with the civil settlement, but the deal also finalizes a criminal settlement announced earlier in the week in which Agility agreed to plead guilty to a misdemeanor and pay $551 in restitution, among other remedies.

“The agreements require Agility to take responsibility for its criminal wrongdoing and take affirmative steps to prevent it from engaging in this conduct again, and the government recovers significant funds that were alleged to have been wrongly paid,” according to a statement by John Horn, U.S. attorney for the Northern District of Georgia.

Government contractors often seek to illegally profit from government programs, even those that are key to the health and safety of members of the military. The False Claims Act was signed into law by Abraham Lincoln during the Civil War to combat this kind of war-profiteering. The Act contained a provision allowing whistleblowers to bring lawsuits on behalf of the federal government, meaning that qui tam law firms and their clients have long been key components in the fight against government programs fraud.

If you are aware of a company that is defrauding the federal government, the law firm of Tycko & Zavareei LLP may be able to assist you in bringing your own qui tam lawsuit under the False Claims Act. Successful qui tam whistleblowers can receive, as their reward, between 15% and 30% of the amount recovered for the government. If you would like to consult with one of our False Claims Act attorneys please fill out our Confidential Case Evaluation form, or call (202) 973-0900 to speak with a lawyer.