Tuesday, 11 Dec 2018
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Surveillance of Army food suppliers questioned after Virginia men's indictment

Afghan soldiers stand on patrol after regaining control of the Loe Manda area in Nad-e-Ali district, Helmand province, Afghanistan. (Photo by WATAN YAR / EPA) (Watan Yar / EPA-EFE / REX / Shutterstock) Aaron Gregg Reporter covering the defense industry and businesses in the Washington area. On December 8th at 10:17, officials of a company charged with providing food and water to US soldiers deployed in Afghanistan were accused of defrauding the government and of having created a fake construction site to overestimate the progress made under an $ 8 billion contract, announced the Department of Justice. in a recently filed indictment. The charges came four years after the company's predecessor pleaded guilty to criminal charges that it had fraudulently inflated the prices of essential items sold to the US military. Both cases highlighted the US military's efforts to limit the abuse of US defense spending in America's oldest foreign war, as the US military presence in Afghanistan enters its 17th year, said analysts. On November 27, the Justice Ministry accused Abdul Huda Farouki, Mazen Farouki, and Salah Maarouf, three Virginia residents who were working for a Dubai-based company, Anham FZCO, to have defrauded the US military. under a $ 8 billion supply contract. The Justice Ministry also accused them of laundering money, violating the sanctions imposed by the United States when sending goods by Iran and photographing a false construction scene in order to mislead public procurement agents. The three individuals pleaded not guilty. The lawsuit rekindled long-standing concerns about Anham's management of public funds and also raised questions about the government's oversight of the subsistence seller contract in Afghanistan, known as SPV-A. The contract is considered important for the US military presence in Afghanistan, as it guarantees deployed US troops access to basic food, water and supplies. However, it is extremely difficult to maintain because the contractor is required to build and maintain a distribution network in the middle of a war zone. The last company to handle this work, a privately owned Swiss company called Supreme Foodservice GmbH, pleaded guilty to similar charges in 2014 and paid $ 288.36 million in fines as a result of charges. a congressional inquiry. Scott Amey, general counsel for the government's non-profit oversight project, described the Pentagon's monitoring of the water supply contract as a "catch-all game if you can" in which the government is losing. "Uncle Sam spends more than $ 500 billion a year on contracts. Responsibility and supervision of contracts are therefore essential to prevent waste, fraud, abuse and corruption. Unfortunately, surveillance often takes second place, "said Amey about the indictment. "The allegations of fraud against Anham are even more troubling because other food service providers in Afghanistan have already pleaded guilty to similar offenses." The Deputy Director of Business Public Defense Defense Agency, Patrick Mackin, declined to comment on the allegations against Anham FZCO, but He notes that the agency "employs a team of experienced procurement specialists who administer this contract in ways that consistent. " He described a detailed process allowing the Defense Logistics Agency to evaluate suppliers in cooperation with other agencies of the Department of Defense. The agency is putting the contract back into competition, he said. The indictment against Anham describes a scheme designed to deceive US procurement agents as the company competes for lucrative government work. The Justice Department claimed that when the company had fallen behind on a construction project of a warehouse complex near Bagram Airfield in Afghanistan, it had released dates of 39; precise completion and "deceptive photos" allowing the project to see further than it actually was. Anham employees were asked to "transport construction equipment, prefabricated sheds, generators, empty shipping containers and a construction crane to the proposed warehouse site in Bagram. in order to create the false appearance of a construction site, "says the DOJ 's indictment. A. Huda Farouki and other employees of Anham "knew that on or about December 1, 2011, there was little construction work at the Bagram warehouse – specifically, that [were] dug and concrete[e] [was] paid for the base of the support columns "for the first warehouse, while there was" no visible structure "for the first warehouse and no work had been done on the second warehouse," said the Ministry of Justice. Anham denied the DOJ's allegations in a statement posted on his website, saying that he had made "good faith efforts to meet aggressive construction deadlines in one of the world's toughest environments." "Noting that" at no time did the company cause loss to the government. "The 442-word statement did not address allegations that the company built and photographed a false construction scene. disappointed that the Department of Justice took this step, which is based on a misinterpretation of the facts and law, and which is contradicted by critical positions taken by the Department itself in previous proceedings in which it defended Anham against some of the same allegations they currently carry. "The company also claimed that the investigation, conducted jointly by the Department of Homeland Security and the Special Inspector General for the Reconstruction of Afghanistan, had been orchestrated by a competitor. He did not name the competitor. The indictment follows a government audit report accusing the company of over-billing the government on a separate contract and a Wall Street Journal investigation that revealed the company had shipped supplies via Iran. The indictment quotes an e-mail in which an Anham official allegedly told an employee of a subcontractor: "Can you take the e-mails away from me?" I am neither interested nor concerned by shipments transiting through Iran. "Then, according to the indictment, the subcontractor's employee replied" how many times do we have to ask to remove the mention of a specific country in all emails? " STOP this mention, please, IMMEDIATELY. Anham admitted to shipping goods through Iran, claiming to have first told the Department of Justice in 2013 and cooperating with the investigators. "Let's be clear, Anham has not dealt with anyone sanctioned and has not sold any illegal material to Iran," said Anham's statement. The company also claimed that "the US law actually allows non-U. S. companies like Anham to make such shipments. " [The Justice Department noted in its indictment that the SPV-A contract solicitation required any bidder to abide by all U.S. laws including sanctions prohibiting business involving Iran.] Anham still holds US supply contracts in Afghanistan, Iraq, Kuwait, Syria and Jordan. In 2015, the agency resumed the contract supply troops for Kuwait, Iraq, Syria and Jordan, entrusting the work to another company. However, Anham protested against the award of the contract and until September 2019 secured a $ 261 million bridge contract that preserves Anham's activities with the Defense Logistics Agency. Defense Expenditure Agencies raise questions about Anham's work. A 2011 report by the Iraqi Reconstruction's Special Inspector General for the Reconstruction of Iraq blames two government agencies for "weak government supervision" of Anham's work on a different set of warehouses in Iraq, reproaching the government for failing to review Anham's relationship with his subcontractors. The review revealed that Anham's general manager, A. Huda Farouki, held significant holdings in several subcontracted companies to work with Anham. The examination revealed that Farouki, through a holding company owned by his family, held 25% of Anham's capital, as well as 100% of the capital of three of his subcontractors, including the company. Unitrans who is now accused of exporting products by Iran. The report specifically denigrated the government's control of the markets, noting that fifteen different procurement officers had been assigned to oversee one of Anham's contracts over a period of two and a half years. According to the report, nearly 40% of the payments reviewed were deemed "questionable". The study revealed that a company called Pioneer Iraqi General Trading Company, owned 90% by the family group of A. Huda Farouki, had already gotten work despite its offers. more than 10 times higher than the prices of a competitor. Among the findings of this review: $ 900 for a water level control switch that a competitor offered to provide $ 7.05; $ 80 for a PVC pipe bend that a competitor offered to provide $ 1.41; Thousands of dollars for circuit breakers that a competitor has offered to provide for less than $ 300 each; $ 650 for a flood light that a competitor offered to provide $ 35.25; and $ 350 for steel rebar that a competitor offered to provide for $ 16.92. "The lack of transparency regarding Anham's relationship with its subcontractors raises the question of whether Anham used due diligence to ensure that the US government receives a fair price for the goods and services it has purchased." noted the Inspector General in his report. The report also criticizes the Defense Contract Management Agency for failing to interview Anham executives about the company's relations with subcontractors. "Exploring these relationships is important because it can raise important questions as to whether there is truly an arm's length commercial relationship between the giver and his underpinnings. contractors, "concluded the review, noting that DCMA officials had admitted that they could have been more thorough in reviewing Anham's work. business. .

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