Federal prosecutors claim Kuwaiti logistics firm charged with fraud is ‘fugitive from justice’

Feds: Kuwaiti logistics firm fugitive from justice

ATLANTA — Frustrated federal prosecutors asked a judge not to dismiss fraud charges against a Kuwaiti company that was paid billions to supply food for the U.S. military in Iraq and Kuwait, calling the logistics firm a “fugitive from justice” that is hiding behind its foreign headquarters.

Prosecutors said in a motion filed late Monday that Public Warehousing Co. “contemptuously contends that it is not subject to the laws or courts of the United States” but asserts in press releases that it looks forward to its day in court.

“The temerity of this defendant is breathtaking,” the court filing said.

Prosecutors in November charged the company, also known as Agility, with inflating prices and defrauding the U.S. government of at least $68 million while supplying soldiers in Kuwait, Iraq and Jordan. The firm has received more than $8.5 billion in food supply contracts and has been the military’s chief food supplier in Kuwait and Iraq since 2003.

Public Warehousing has asked the court to block the charges, arguing that prosecutors failed to properly serve the company. They contend that the indictment should have been sent through diplomatic channels to Kuwait rather than to its U.S. subsidiaries.

The government’s contention, the company said in a statement, “substitutes rhetoric for legal analysis and provides no justification for its decision to ignore longstanding U.S. law on proper service of process.”

Prosecutors say the firm has so far stymied their efforts to formally serve them with the indictment.

The firm approved a measure that allowed only one official to accept the charges — and that person is out of the U.S., the motion said. It also said that the company has sought and received “safe passage” from federal officials for employees to meet with defense officials in the U.S.

The legal back-and-forth has so far prevented the courts from considering the government’s assertion that Public Warehousing manipulated a complex funding formula to defraud the U.S. government.

The indictment said the company provided false invoices and statements to a logistics center and knowingly inflated prices. And it said the company received rebates and discounts from vendors that it did not pass to the government as required by the contract.

The company also inflated fees by asking vendors to manipulate the way the products were packed, enabling it to bill the government twice as much as it should have, prosecutors said. And they said the firm encouraged a vendor in the state of Georgia to conceal fees that should have been paid to the company.