U.S. poised to drop Agility fraud case
Agility Logistics appears to have succeeded in using a due process technicality to shake charges it defrauded the U.S. government of $68 million on a huge contract to supply food to troops in Iraq and Kuwait, but the victory doesn't yet mean the Kuwait-based company is out of hot water.
Agility issued a statement over the weekend saying a U.S. magistrate in Atlanta has recommended dismissing an indictment against Agility DGS Holdings Inc.
Defense & Government Services (DGS) is the Agility subsidiary that procured and distributed food to soldiers in the Middle East.
Early last week U.S. Magistrate Judge Alan Baverman agreed with federal prosecutors' request to drop charges against Agility DGS without prejudice.
The development comes almost one month after Baverman recommended to the U.S. District Court in Atlanta that the case not proceed because of problems with the way papers were served.
Agility has argued that the charges were improperly filed with its U.S. subsidiary instead of with the parent company, PWC Logistics, in Kuwait. Prosecutors responded to the judge's initial recommendation by asking the remaining charges against Agility DGS be dropped so that the parent company is protected by the subsidiary.
Justice Department lawyers have said they are still gathering evidence in the case and have not ruled out filing a new indictment against Agility/PWC.