KUWAIT CITY, Jan 9, (RTRS): Kuwaiti logistics firm Agility said on Sunday that the latest report about a new civil case filed against the firm was not true. “The new civil case it spoke about is not a new lawsuit against Agility, but a procedural amendment to the case that was announced in November 2009,” Agility said in a statement on the Kuwaiti bourse website. On Friday, Reuters reported that US prosecutors have filed a civil suit against Kuwaiti logistics company Agility, accusing it of defrauding the government over food product contracts to the US military in the Middle East worth $9.8 billion. The firm’s shares were down 5 percent at GMT 0723 on the news. A criminal case was filed in November 2009 when prosecutors accused Agility, formerly Public Warehousing Co K.S.C., of overcharging the US Army over 41 months on $8.5 billion in contracts first signed at the start of the Gulf War in 2003.

If convicted, the company faces a fine of twice the gains it realized or twice the loss to the United States.
The logistics firm was the largest supplier to the US Army in the Middle East during the war in Iraq and the case is politically sensitive in both Washington and Kuwait. The government aims to “recover all available damages for common law fraud, payment under mistake of fact, unjust enrichment and breach of contract,” said the suit filed on Wednesday. In the first scheme, the company falsely inflated prices for perishable items and local market ready items, the suit said, and in the second scheme, it overcharged the government by failing to disclose discounts it received.

Agility has long argued that it regards the entire case as a contract dispute that should be settled through negotiation. Prosecutors first launched a criminal indictment against Agility in November 2009 for attempts to defraud the US military over supply contracts in a case that is politically sensitive in both the United States and Kuwait. The civil suit appears to run in parallel with that indictment, which says the company overcharged the US Army over 41 months on $8.5 billion in contracts first signed at the start of the Gulf War in 2003.

“The United States to date has paid in excess of $9.8 billion in claims for goods and services under the prime vendor contracts at issue in this complaint and the United States continues to pay PWC,” the civil suit said. Negotiations in 2010 appeared to stall but the company says it has been hurt because of a decision by US authorities to suspend it from bidding for new US government contracts. Agility has subsidiaries in both the United States and Kuwait and in 2010, pretrial motions in the criminal case focused in part on whether prosecutors originally served only the US subsidiary, rather than its parent.