Three Senior Executives at Defense Contracting Firms Charged with Scheme to Defraud the U.S. Military in Connection with $8 Billion Troop Supply Contract and with Violating the Iran Sanctions Regime
Three men were charged in an indictment returned Nov. 27 for their roles in a scheme to defraud U.S. Military contracts in Afghanistan, engaging in illegal commerce in Iran, and laundering money internationally. Their conduct was in connection to two multi-million dollar contracts to provide supplies and logistical support to U.S. troops in Afghanistan.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Patrick J. Lechleitner of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C. 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 laundering.
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 U.S. 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 U.S. 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 Anham’s 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 U.S. citizens and companies from engaging in commercial activity in Iran.
According to the indictment, the defendants conspired to increase Anham’s 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 Anham’s 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 U.S. 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 laundering.
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 Division’s Fraud Section are prosecuting the case.
https://www.justice.gov/opa/pr/three-senior-e...s-military
CLINTON DONORS GET A PASS ON SHADY CONTRACTING
In June 2011, the Defense Department’s Office of the Special Inspector General for Iraq Reconstruction (SIGIR) released a scathing report on a defense contracting company called Anham. The title of the report and its conclusion were the same: “Poor Government Oversight of Anham and Its Subcontracting Procedures Allowed Questionable Costs To Go Undetected.”
Dubai-based Anham and its “affiliated” subcontractors were awarded a $119 million contract in 2007 to provide materials to the Iraqi Security Forces. The DOD review analyzed Anham’s business practices for contracts representing 40 percent of its award, or $40 million taxpayer dollars and found problems and irregularities in Anham’s estimating and billing, sub-contractor relationships, and delivery confirmations.
The report recommended that the Office of the Secretary of Defense further monitor and review much of Anham’s contracting activity in Iraq and Afghanistan.
So how did Anham then go on to win an $8 billion multi-year contract in Afghanistan which allowed it to illegally ship supplies through two Iranian border crossings and a seaport controlled by the Iranian Revolutionary Guard ?
Here's how!
Personally, and through his businesses, Mr. Farouki has been donating to Democrats since the mid-1990s. During the 2004 Democratic primaries, he financially supported both John Kerry and John Edwards. In 2000, he gave at least $67,000 to the Democratic National Committee, while Mrs. Farouki making a small donation to the Bush campaign, presumably to hedge their bets.
The Faroukis are a longtime donors to California Senator Dianne Feinstein, their neighbor in Aspen, current member of the Defense Appropriations Subcommittee, chairman and ranking member of the Senate Military Construction and Appropriations Committee for many years.
Feinstein has attracted wide criticism when defense contracting companies affiliated with her husband received favorable status in contract awards. They have also been generous to Virginia Congressman Jim Moran, whose election bids have been fraught with illegal donations from contractors, and who serves on the House Defense Appropriations Committee.
Obama For America benefitted from Farouki generosity with multiple contributions made in 2008 — before Anham was awarded another $8 billion from the administration after his fraudulent business practices became a matter of public record.
The family’s closest affiliation is with the Clintons. Between 1995 and 2008, Farouki family members — including two associated with the same UniTrans International, under scrutiny for the Iran transshipment — made at least 19 donations to Clinton-associated campaigns.
Since 2005, Farouki has participated in The Clinton Global Initiative, and during his presidency, Bill Clinton appointed him to the prestigious advisory board for Washington’s Kennedy Center.
Mr. Farouki is a brilliant businessman and DC power player. And there is certainly nothing wrong with embracing an ideology and financially supporting politicians who practice it.
But remember the $600 Defense Department hammer controversy from the 1980s? And liberals screaming over Halliburton during the Bush Presidency? SIGIR found Anham billed American taxpayers $900 for a $7.00 electric switch, and $80 for a $1.40 drainpipe.
Where is the outrage? Or even media coverage? Why did the government ignore contracting irregularities and then award the same company billions in new contracts?
There seems to be a pervasive ‘I can get away with it’ attitude for individuals and companies who feel protected by the Obama Administration and Camp Clinton.
Perhaps it is time for “the most transparent administration in history” to look a little closer, and for taxpayers to demand they adhere to the objective, non-political standards of military contracting.
https://dailycaller.com/2013/09/30/clinton-do...ntracting/
Three men were charged in an indictment returned Nov. 27 for their roles in a scheme to defraud U.S. Military contracts in Afghanistan, engaging in illegal commerce in Iran, and laundering money internationally. Their conduct was in connection to two multi-million dollar contracts to provide supplies and logistical support to U.S. troops in Afghanistan.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Patrick J. Lechleitner of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C. 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 laundering.
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 U.S. 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 U.S. 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 Anham’s 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 U.S. citizens and companies from engaging in commercial activity in Iran.
According to the indictment, the defendants conspired to increase Anham’s 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 Anham’s 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 U.S. 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 laundering.
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 Division’s Fraud Section are prosecuting the case.
https://www.justice.gov/opa/pr/three-senior-e...s-military
CLINTON DONORS GET A PASS ON SHADY CONTRACTING
In June 2011, the Defense Department’s Office of the Special Inspector General for Iraq Reconstruction (SIGIR) released a scathing report on a defense contracting company called Anham. The title of the report and its conclusion were the same: “Poor Government Oversight of Anham and Its Subcontracting Procedures Allowed Questionable Costs To Go Undetected.”
Dubai-based Anham and its “affiliated” subcontractors were awarded a $119 million contract in 2007 to provide materials to the Iraqi Security Forces. The DOD review analyzed Anham’s business practices for contracts representing 40 percent of its award, or $40 million taxpayer dollars and found problems and irregularities in Anham’s estimating and billing, sub-contractor relationships, and delivery confirmations.
The report recommended that the Office of the Secretary of Defense further monitor and review much of Anham’s contracting activity in Iraq and Afghanistan.
So how did Anham then go on to win an $8 billion multi-year contract in Afghanistan which allowed it to illegally ship supplies through two Iranian border crossings and a seaport controlled by the Iranian Revolutionary Guard ?
Here's how!
Personally, and through his businesses, Mr. Farouki has been donating to Democrats since the mid-1990s. During the 2004 Democratic primaries, he financially supported both John Kerry and John Edwards. In 2000, he gave at least $67,000 to the Democratic National Committee, while Mrs. Farouki making a small donation to the Bush campaign, presumably to hedge their bets.
The Faroukis are a longtime donors to California Senator Dianne Feinstein, their neighbor in Aspen, current member of the Defense Appropriations Subcommittee, chairman and ranking member of the Senate Military Construction and Appropriations Committee for many years.
Feinstein has attracted wide criticism when defense contracting companies affiliated with her husband received favorable status in contract awards. They have also been generous to Virginia Congressman Jim Moran, whose election bids have been fraught with illegal donations from contractors, and who serves on the House Defense Appropriations Committee.
Obama For America benefitted from Farouki generosity with multiple contributions made in 2008 — before Anham was awarded another $8 billion from the administration after his fraudulent business practices became a matter of public record.
The family’s closest affiliation is with the Clintons. Between 1995 and 2008, Farouki family members — including two associated with the same UniTrans International, under scrutiny for the Iran transshipment — made at least 19 donations to Clinton-associated campaigns.
Since 2005, Farouki has participated in The Clinton Global Initiative, and during his presidency, Bill Clinton appointed him to the prestigious advisory board for Washington’s Kennedy Center.
Mr. Farouki is a brilliant businessman and DC power player. And there is certainly nothing wrong with embracing an ideology and financially supporting politicians who practice it.
But remember the $600 Defense Department hammer controversy from the 1980s? And liberals screaming over Halliburton during the Bush Presidency? SIGIR found Anham billed American taxpayers $900 for a $7.00 electric switch, and $80 for a $1.40 drainpipe.
Where is the outrage? Or even media coverage? Why did the government ignore contracting irregularities and then award the same company billions in new contracts?
There seems to be a pervasive ‘I can get away with it’ attitude for individuals and companies who feel protected by the Obama Administration and Camp Clinton.
Perhaps it is time for “the most transparent administration in history” to look a little closer, and for taxpayers to demand they adhere to the objective, non-political standards of military contracting.
https://dailycaller.com/2013/09/30/clinton-do...ntracting/
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