Supreme Food Service Settles Criminal and Civil Qui Tam Case with DOJ
16th December 2014
Supreme Foodservice GmbH, a privately held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates (UAE) company, pled guilty to a major fraud against the United States and agreed to resolve civil violations of the False Claims Act, in connection with a contract to provide food and water to the U.S. troops serving in Afghanistan. The companies pled guilty in federal court in Philadelphia and paid $288.36 million in the criminal case, a sum that includes the maximum criminal fine allowed.
Supreme Group B.V. and several of its subsidiaries have agreed to pay an additional $146 million to resolve a related civil lawsuit, as well as two separate civil matters, alleging false billings to the Department of Defense for fuel and transporting cargo to American soldiers in Afghanistan. The civil case alleged that the Supreme food group violated the False Claims Act by knowingly overcharging for supplying food and water under the SPV contract. The payment also resolves claims that, from June 2005 to December 2010, the Supreme food companies failed to disclose and pass through to the government rebates and discounts it obtained from its suppliers, as required by its SPV contract with the United States.
In 2005, Supreme Foodservice AG, now called Supreme Foodservice GmbH, entered into a contract with the Defense Supply Center of Philadelphia to provide food and water for the U.S. forces serving in Afghanistan. Between July 2005 and April 2009, Supreme Foodservice AG, together with Supreme Foodservice KG devised and implemented a scheme to overcharge the United States in order to make profits over and above those provided in the $8.8 billion subsistence prime vendor (SPV) contract. The companies fraudulently inflated the price charged for local market ready goods (LMR) and bottled water sold to the United States under the SPV contract. The fraud resulted in a loss to the government of $48 million.