One of the notable cases is that of Supreme Foodservice, a “prime vendor” supplying food and water for the U.S. forces serving in Afghanistan.
Supreme Foodservice pleaded guilty to major fraud against the United States. The three-time repeat offender was fined the maximum penalties and paid $288.36 million in the criminal case.
In addition, Supreme Group B.V., a privately held Dutch corporation, and its subsidiaries, Supreme Foodservice GmbH and Supreme Foodservice FZE, have agreed to pay $101 million to resolve allegations in a whistleblower lawsuit that Supreme violated the False Claims Act.
According to the U.S. Justice Department, between July 2005 and April 2009, Supreme Foodservice AG together with Supreme Foodservice KG (which is now called Supreme Foodservice FZE) created and carried out a scheme to derive excess profits over the amount allowed by their contract with the United States.
The defendants did this by running orders through a middleman company they controlled, and using that company to substantially mark up the costs of water and fresh fruits and vegetables.
The fraud resulted in a loss to the government of $48 million. In addition, as a result of the criminal investigation, Supreme paid $38.3 million directly to Defense Supply Center of Philadelphia (“DSCP,” now called Defense Logistics Agency – Troop Support) as a refund for separate overpayments on bottled water.
The costs of fraud
According to TAF’s unofficial statistics, this, and similar cases filed under the False Claims Act helped return approximately $3 billion to the U.S. taxpayer in Fiscal Year 2015.
Whistleblower cases that accounted for the lion’s share of the monies recovered came from health care, hospital services, mortgage and financial industries, and defense contracting.
As fraud cases increase, more and more whistleblowers are stepping forward to expose them. If you think you have a case of fraud or misconduct but are not sure how to safely do the right thing, call our 24-hr hotline at (801) 323-5000 for a free, confidential consultation.