A Los Angeles company paid $4 million to resolve civil allegations that it fraudulently overcharged the U.S. military for fresh fruits and vegetables supplied to military dining facilities and Navy ships, it was announced today.
As part of a second agreement with criminal prosecutors, Coast Produce Co. will implement various measures to ensure the company complies with its legal obligations, according to the U.S. Attorney’s Office.
Coast Produce’s settlement agreements with the government resolve a civil lawsuit and a criminal investigation into allegations that the company violated the federal False Claims Act and obstructed an investigation related to two contracts the company had with the Department of Defense to supply fresh produce to the military in the Los Angeles and San Diego regions, prosecutors said.
The allegations against Coast Produce first surfaced in a “whistleblower” lawsuit filed in 2008 by an industry consultant.
To resolve the allegations in the lawsuit, Coast paid a $4 million settlement on Sept. 2, and a federal judge unsealed and dismissed the civil lawsuit two weeks later.
The criminal charges against Coast Produce alleged that the company altered or falsified records.
Federal prosecutors alleged that the company provided false invoices to the DoD when it requested evidence concerning the prices Coast was paying for produce it provided the military.
The charges were filed pursuant to a Deferred Prosecution Agreement, in which the government agreed to defer any criminal case against the company for a two-year period in return for an agreement to implement various compliance and remedial measures during that period, among other things, according to the U.S. Attorney’s Office.
U.S. District Judge Percy Anderson dismissed the charges filed by the government Friday, though they can be refiled in the event of a breach of the agreement by Coast, prosecutors said.
“The agreements with Coast Produce demonstrate that this office will use all criminal and civil tools at its disposal to ensure that contractors who overcharge the United States military are held accountable,” said Eileen M. Decker, the U.S. attorney in Los Angeles.
“Companies that supply products and services to our military members should know that our office will aggressively investigate those who seek to unlawfully profit from that relationship,” she said.
