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2.12.2018 3 men charged with fraud in $8b troop supply contract
KABUL (Pajhwok): Three senior executives at defense contracting firms have
been charged with scheme to defraud the US military in connection with $8
billion troop supply contract and with violating the Iran sanctions

The three men were charged in an indictment returned Nov. 27 for their
roles in a scheme to defraud US military contracts in Afghanistan,
engaging in illegal commerce in Iran, and laundering money

The US State Department for Justice in a statement said the mens conduct
was in connection to two multi-million dollar contracts to provide
supplies and logistical support to US troops in Afghanistan.     

Assistant Attorney General Brian A. Benczkowski of the Justice
Departments Criminal Division, Special Agent in Charge Patrick J.
Lechleitner of US Immigration and Customs Enforcements Homeland Security
Investigations (HSI) Washington, DC and Special Inspector General for
Afghanistan Reconstruction (SIGAR) John F. Sopko made the announcement.

Abul Huda Farouki, 75, of McLean, Virginia; his brother Mazen Farouki, 73,
of Boyce, Virginia; and Salah Maarouf, 71, of Fairfax, Virginia, were each
charged in an indictment filed in the District of Columbia with two counts
of major fraud, one count of conspiracy to violate the restrictions on
doing business with Iran, four counts of substantive violations of those
restrictions, and one count of conspiracy to commit international money

The defendants made their initial appearance on Nov. 29 before Judge G.
Michael Harvey.  All were arraigned and pleaded not guilty.  The next
hearing is scheduled for Dec. 6 before Judge Trevor N. McFadden.

The indictment alleges that Abul Huda Farouki was the chief executive
officer of Anham FZCO, a defense contractor based in the United Arab
Emirates (UAE), which maintained offices in Dubai, UAE, Jordan and the
United States. 

Mazen Farouki was the President and Founder of Unitrans International
Incorporated, an international logistics company with close ties to Anham.
 Defendant Salah Maarouf operated a company that procured goods and
services for Anham. 

According to the indictment, on June 22, 2012, the U.S. Department of
Defense awarded Anham an $8 billion contract to provide food and supplies
to US troops in Afghanistan known as the SPV-A contract. 

As part of the bidding process, the defendants allegedly caused Anham to
represent that it would build two warehouses in Afghanistan, which Anham
would use to provide supplies to US forces. 

The indictment alleges that the defendants schemed to defraud the
Department of Defense in connection with the SPV-A contract by submitting
bids that contained knowingly false estimates of the completion dates for
the warehouses and by providing the government with misleading photographs
intended to convey that Anhams progress on the warehouses was further
along than it actually was. 

Specifically, the indictment alleges that, in February of 2012, the
defendants and others caused Anham employees to transport construction
equipment and materials to the proposed site of one of the warehouse
complexes to create the false appearance of an active construction site. 

Members of the conspiracy then photographed the site, provided the
photographs to the Department of Defense, and then largely deconstructed
the staged construction site.    

The SPV-A contract also required bidders to certify that they abide by the
Iran Sanctions Act, which prohibits US citizens and companies from engaging
in commercial activity in Iran. 

According to the indictment, the defendants conspired to increase Anhams
profits in connection with the SPV-A contract by shipping warehouse
building materials to Afghanistan via Iran, instead of using more costly,
but legal, routes. 

According to the indictment, after learning that the Wall Street Journal
was planning to run a story detailing Anhams practice of shipping
materials through Iran, Abul Huda Farouki sent an email to a senior
Department of Defense official, which falsely claimed that senior
management at Anham had been unaware that the transshipments through Anham
had taken place. 

In addition to the SPV-A contract, the indictment alleges that the
defendants schemed to defraud the Department of Defense with respect to
the National Afghan Trucking (NAT) contract, which was a $984 million
contract that required Anham to supply trucking services to the US
Military in Afghanistan. 

As with the SPV-A contract, the NAT contract required bidders to certify
compliance with laws concerning sanctions placed on Iran. 

According to the indictment, rather than ship trucks to Afghanistan using
legal but relatively expensive routes, the defendants conspired to cut
costs by transporting vehicles through Iran. 

The indictment alleges that the defendants conduct violated laws
prohibiting fraud, commercial activity with Iran, and international money

The charges in the indictment are merely allegations and all defendants
are presumed innocent until proven guilty beyond a reasonable doubt in a
court of law.

The case was investigated by HSI Washington, DC and by investigators at
SIGAR.  Trial Attorneys James Gelber and Danny Nguyen of the Criminal
Divisions Fraud Section are prosecuting the case.

ANHAM FZCO response
In response, ANHAM in a statement said they were extremely disappointed by
the Justice Department action, which it said was based on a mistaken
reading of both the facts and the law.

It said ANHAM saved US taxpayers $1.4 billion through its contract to
provide food to US troops serving in Afghanistan and in preparing for that
contract it made good faith efforts to meet aggressive construction
timelines in one of the most difficult environments in the world.

At no time did ANHAMs former employee or subcontractors cause any loss to
the federal government , the statement said, adding the government received
exactly what it was promised , a price significantly below that of ANHAMs
main competitor.

In meeting that contract, ANHAM has provided sustenance including fresh
fruit and vegetables, frozen, chilled and dry goods and water to feed and
support American warfighters in active war zones since 2013.

ANHAM and its related subcontracting companies first self-reported
shipments made through Iran in 2013, and have been cooperating with the
Justice Department since the onset of its investigation. 

This investigation has been pushed by ANHAMs chief competitor, a company
that itself pled guilty to defrauding the United States, and which now
seeks to profit through false accusations it has made in a civil case
against ANHAM.

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