Troops based in Southern California may have been noshing on some pricey pineapples and bananas.
A produce supplier has paid the government $4 million to settle a lawsuit alleging that the fruit vendor routinely overcharged the military for fresh fruit and vegetables delivered to ships in San Diego and dining facilities there and around Los Angeles, the Justice Department said Monday.
Under its Defense Department contract, Coast Produce Company could only charge the current prices of fresh foods provided by their suppliers plus a delivery fee. A whistleblower lawsuit alleged that the fruit distributor jacked up the prices by asking for inflated quotes from its suppliers and by charging DoD based on high rates from suppliers that Coast Produce did not buy from.
The U.S. Attorney's Office alleged in September that Coast Produce falsified its invoices to bilk the military. The allegations did not concern the quality of the fruit and veggies provided to the troops, however.
Coast Produce did not admit any wrongdoing as part of the terms of the agreement, which settles the civil lawsuit and criminal investigation. The government will shelve its criminal inquiry provided that the company implements changes and does not violate the agreement within two years.
"Overcharging the Department of Defense is always reprehensible because it drains precious funds and resources necessary to protect America's warfighters," said Chris Henderson, a special agent in charge with the Defense Criminal Investigative Service, which led the investigation, in a statement. "The Defense Criminal Investigative Service will continue to investigate any individual or business who pursues personal enrichment at the expense of U.S. taxpayers."
The civil suit was brought by industry consultant Kevin Driscoll under the federal False Claims Act. The U.S. Attorney's Office decided to intervene and negotiate a settlement, of which Driscoll will receive $920,000.
Of course, this isn't the only recent allegation of the government getting scammed by its contractors.
The Justice Department and the Naval Criminal Investigative Service are investigating the port services contractor that allegedly bribed naval officers and an NCIS supervisor with gifts, prostitutes, junkets and lavish dinners in return for steering ships to ports where they could overcharge the Navy.
The firm led by Leonard Glenn Francis is believed to have bilked the Navy over $20 million as it provided services to ships during port visits across the Asia-Pacific region. Francis, known as "Fat Leonard," has pleaded guilty and faces up to 25 years in prison.
A handful of officers have pleaded guilty in the case and three admirals have been reprimanded for alleged ethical violations.