U.S. military’s Afghanistan food supplier stays in picture despite $45 million fraud settlement

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Dubai-based logistics company Anham is at least the third supplier for the Defense Logistics Agency’s primary Afghan troop supply contract to be involved in massive fraud allegations. Anham’s former Virginia-based subsidiary, Unitrans International, agreed to pay the settlement last week to resolve federal criminal and civil complaints of obstruction and making false claims.

The settlement highlights how the U.S. military effort in Afghanistan, which has stretched for nearly two decades and cost taxpayers at least $1 trillion, has consistently created opportunities for fraud.

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Three executives associated with Anham, including longtime chief executive Abul Huda Farouki, were indicted by the Justice Department last year. They were accused of setting up a fake construction scene ― referred to by whistleblowers as a “Potemkin Village” ― to overstate progress on a warehouse, jacking up prices for basic items sold to deployed military units and illegally shipping products through Iran.

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The settlement is the latest example of a private company using the war in Afghanistan to earn excessive profits at taxpayers’ expense. The supplier before Anham, a Swiss company called Supreme Foodservice GmbH, pleaded guilty to similar charges and paid $288 million in criminal fines. The supplier before that, a Kuwaiti company called Agility Public Warehousing, spent $95 million to resolve civil fraud charges of its own.

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https://www.washingtonpost.com/business/2019/12/12/us-militarys-afghanistan-food-supplier-keeps-lucrative-contract-after-massive-fraud-settlement/