Swiss contractor to pay $434 million for overcharging U.S. on food, water

Reuters News
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Posted: Dec 08, 2014 3:58 PM

WASHINGTON (Reuters) - Swiss firm Supreme Foodservice GmbH pleaded guilty on Monday to overcharging the United States for food and bottled water it provided to U.S. armed forces in Afghanistan and will pay $434 million to resolve a series of related cases, according to court documents.

The company had contracts worth $8.8 billion between 2005 and 2013 with the U.S. military, through which it received $48 million in illegal profits, prosecutors said.

The settlement includes $288 million paid in connection with the guilty plea and $146 million to resolve civil U.S. claims, some of which were originally brought by a whistleblower. The cases were investigated by federal prosecutors and Justice Department lawyers in Pennsylvania, Virginia, Illinois and Washington, D.C.

The company, formerly known as Supreme Foodservice AG, engaged in the fraud by using a middleman to mark up prices on local produce and obscure inflated prices for bottled water, according to the plea agreement.

Prosecutors said the inflated prices included a 125 percent mark-up on non-alcoholic beer.

“The department will pursue contractors that knowingly seek taxpayer funds to which they are not entitled," Joyce Branda, head of the Justice Department's civil division, said in announcing the agreements.

The company said in a statement it regretted and accepted responsibility for its past actions, and that it had implemented new compliance processes.

(Reporting by Aruna Viswanatha in Washington and Tom Hals in Wilmington, Delaware; Editing by Dan Grebler)