Wednesday, March 30, 2011

Freight Industry Focused On US Army Logistics Case

Battle Lines Drawn in Billion Dollar Fraud Suit
Shipping News Feature

US – KUWAIT- The lengthy case in which Agility Logistics is being prosecuted by no less than the US Government looks destined to continue for some time. The full history of the case can be traced through our previous stories or the dedicated website the freight forwarder has set up for the purpose of putting their side of the argument.

Yesterday a US District Court judge issued a 93 page report in which he concluded that US prosecutors had correctly served papers on Agility two years ago despite the company’s claim that the suit should have been levied against the group holding company the Public Warehousing Company (PWC) not, as it claimed, against the US based branch of Agility. This seems to contradict the FBI statement issued in November 2009 indicating ‘PWC also known as Agility’ which clearly sets out the case for the Government.

Judge Thomas Thrash overruled a previous decision by an Atlanta Court and concluded the two groups were mutually dependent, with Agility only responsible for PWC business in the USA and that therefore the summons effectively covered any or all companies concerned. This latest judgement would seem to leave the way clear for the criminal prosecution the US authorities want whilst Agility have claimed from the very beginning that, as a purely commercial matter, this case should be heard in a civil Court, no matter that the plaintiff is coincidentally the US Government.

Agility’s representatives tell us they intend to persist in trying to resolve the matter by way of dialogue with the Justice Department stating that all their processes and procedures were audited during the course of the contract, supplying food and consumables worth in excess of $8.5 billion to US forces in the war zones of Iraq and Kuwait since 2003.

The company also says it has been ‘disappointed’ by this recent setback and will continue to consider its options in the light of the Court’s decision. With such a huge amount of money involved, the sensitivity of the case and reputations to be made or destroyed in the prosecutor’s office their fate may well not depend on their own legal tactics. Agility shares fell upon release of the Court’s decision and have apparently lost over a quarter of their value in the past three months.