Federal government extracts $389M penalty from contractor who admits price gouging military

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Two companies are paying huge fines after admitting to inflating the cost of items sent to U.S. troops overseas.

Swiss company Supreme Foodservice and a United Arab Emirates subsidiary have agreed to pay a total of $389 million in damages criminal and civil penalties. They’re admitting to overcharging the Philadelphia-based Defense Logistics Agency for food and water supplied to troops in Afghanistan.

Assistant U.S. Attorney Bea Witzleben says they overcharged for everything from ice to non-alcoholic beer.

“Supreme’s owner, the majority owner, actually marked up the beer, his lower executives suggested a 25 percent, he raised it to a 125 percent markup.”

The company did almost $9 billion worth of business with the American government. It admitted to overcharging by about $50 million.

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