Anham FZCO is a defense contractor based in the United Arab Emirates, although three of its executives live in North Virginia. Fox reported that Abdul Huda Farouki, 75, the former Anham CEO; his brother Mazen Farouki, 73; and Salah Maarouf, 71, pleaded not guilty to eight counts each of fraud and violating sanctions against Iran, as well as money laundering.
“Abdul Huda Farouki and his wife were Washington socialites and donated to the Clinton family charity, The Wall Street Journal reported. The Washington Post reported that the former CEO celebrated New Year’s Eve with the Clintons in 1999 and was invited to a state dinner. The report pointed to a Bloomberg article that cited a government audit that found that Anham overbilled the Pentagon $4.4 million.”
They bid to build two warehouses in Afghanistan, one of which was to be at Bagram Air Field that were to be for supplying US and Coalition troops. The company sent fake photographs to the DoD giving false “estimates” of completion.
According to Stripes, they initially planned to ship steel through Pakistan, but that country shut its borders in 2012. So they came up with what was described as an “elaborate” plan to ship it through Iran, which was illegal.
The Justice Department wrote (emphasis mine),
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.
As if faking a construction site wasn’t bad enough, they violated the Iran sanctions by running their steel shipments through Iran, which was illegal. Then when the Wall Street Journal found out and planned to run a story, Anham FCZO sent a letter to the DoD saying that they had “no idea”someone was doing that.
The indictment also alleges that the defendants tried to defraud the Department of Defense from the $984 Million National Afghan Trucking contract. That portion was supposed to supply US and coalition troops as well.
The company has denied all charges. They issued a statement, which read, in part:
We are extremely disappointed that the Justice Department took this action, which is based on a mistaken reading of both the facts and the law, and which is contradicted in critical respects by positions the department itself has taken in past proceedings where it defended ANHAM against some of the same allegations it is now making. ANHAM has saved U.S. taxpayers $1.4 billion through its contract to provide food to U.S. 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.
H/T Uncle Sam’s Misguided Children
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