ATLANTA (AP) — Federal prosecutors are investigating possible new charges against a Kuwaiti military food supplier accused of defrauding the U.S. government of at least $68 million, and they are seeking to question a retired U.S. Army general who works for the firm, according to court records.
U.S. District Judge Thomas Thrash said in an order this week that prosecutors are investigating "potential new charges" against The Public Warehousing Co., which is also known as Agility. The order upheld the government's request to subpoena Dan Mongeon, an ex-Army major general who is chief executive of an Agility unit.
Prosecutors in November 2009 unveiled the indictment charging the Kuwaiti company with manipulating a complex funding formula to defraud the U.S. government of at least $68 million in contracts to supply troops in Iraq, Kuwait and Jordan.
The case then stalled, with prosecutors and the Kuwaiti company's attorneys locked in a drawn-out legal fight over whether the firm was ever properly served. A magistrate judge sided with the supplier in September, but Thrash reversed the ruling in March and the 11th Circuit Court of Appeals declined to review the ruling.
Attorneys have since clashed over other legal issues, and Mongeon's court summons is the latest flashpoint. Agility's attorneys said calling on Mongeon to testify before a grand jury was inappropriate, but Thrash rejected their motion in a three-page order docketed Wednesday.
The Kuwaiti company is charged with providing false invoices and statements to a logistics center and knowingly inflating prices since 2003. The firm also received rebates and discounts from vendors that it did not pass on to the government as required by the contract, prosecutors said.
And the company is accused of inflating fees by asking vendors to manipulate the way the products were packed, enabling it to bill the government twice as much as it should have.
Agility has repeatedly said that it believes the case involves a civil contract dispute, not a criminal matter. It said in a statement this month it was committed to working with prosecutors to resolve the dispute out of court but "prepared to defend itself vigorously if those discussions are not fruitful."