Unitrans International: The Iran Route Behind an Afghan Food Contract

In the Unitrans International settlement, the company agreed to pay $27 million to resolve civil allegations that false Iran-sanctions certifications helped secure military food and truck contracts. For someone inside the operation, the case connects what the logistics team knew about a shipment with what the government heard about the contractor’s compliance.

The Justice Department announced the resolution on December 4, 2019. Unitrans International Inc., a privately held Virginia defense contractor, provided logistics services to Anham, an associated Dubai Free Zone company. In a separate criminal non-prosecution agreement, Unitrans admitted that officers at both companies obstructed proceedings before the Defense Logistics Agency.

The Certifications Behind the Contract Awards

The government alleged that Unitrans and Anham knowingly made false sanctions-compliance certifications to induce the Defense Logistics Agency and the Army to award wartime food and truck contracts. The civil settlement also covered an allegation that Anham falsely represented construction progress on its Bagram warehouse to obtain the agency’s prime vendor contract for food supplied to U.S. troops in Afghanistan.

The Defense Logistics Agency awarded Anham its troop-support contract in June 2012. That contract required Anham to certify compliance with the prohibitions on U.S. people and companies shipping materials through Iran. The promise reached into the transportation operation behind the contract, where Unitrans supplied the logistics services.

This overseas defense logistics fraud case reached back to the promises used to win the work. An employee who knew the construction or shipping operation could recognize a contradiction before a disputed delivery charge appeared on a bill.

Officers Knew the Route, Then the Agency Heard Otherwise

Under its criminal non-prosecution agreement, Unitrans admitted that high-level officers at Unitrans and Anham knew about the Iran shipments while they were happening and took no action to stop them. The agreement also described Unitrans officers arranging shipments of construction materials through Iran to Afghanistan between November 2011 and May 2012. Those materials went into the warehouse used to support Anham’s troop-supply contract.

Then came the message to the government. On September 23, 2013, Anham’s then-chief executive, who was also an indirect and partial owner of Unitrans, emailed a Defense Logistics Agency representative about the shipments:

We see a senior team claiming ignorance of shipments its officers knew about as they happened. For an insider who saw the route decisions, the contradiction is concrete: what the officers knew, and what the agency was told afterward.

The Prime’s Promise and the Logistics Provider’s Knowledge

A prime contractor deals directly with the government, while subcontractors, suppliers and vendors furnish goods or services within the award. The people arranging transportation may therefore know something the agency’s contracting staff cannot see from the prime’s certification. In Unitrans’s case, the government-facing promise and the physical movement of construction materials connected different companies doing different parts of the same work.

In its 2022 report Hidden Costs: US Private Military and Security Companies and the Risks of Corruption and Conflict, Transparency International Defence and Security recommended that prime contractors disclose subcontractors, their ownership and the itemized value of their services when submitting invoices. It also recommended providing subcontractor information when bidding for new U.S. contracts. Unitrans shows why that ownership information matters: the executive who spoke for Anham partly owned the logistics company whose officers knew the route.

A Shipping Bill Can Hide a Different Part of the Transaction

Maersk Line Limited agreed to a $31.9 million civil settlement over military-shipping allegations involving Afghanistan and Iraq. The government alleged inflated refrigeration charges, charges for tracking and security services that were absent or only partly provided, and storage rebates that never reached the government as credits. A former industry insider brought that case.

Those allegations put the service and supplier records beside the government’s bill. Unitrans’s case puts the route and warehouse beside the promises used to obtain the award. In each, someone who knows the operation can explain the part of the transaction that the government’s paperwork leaves out.

Who Brought the Civil Case and Who Investigated

Two individual whistleblowers and Supreme Foodservice GmbH brought the False Claims Act qui tam case behind the Unitrans civil settlement. The government let the private parties pursue the case on its behalf. The Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Virginia handled the civil litigation, with support from the Defense Contract Audit Agency.

U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Defense Criminal Investigative Service and investigators from the Special Inspector General for Afghanistan Reconstruction investigated the criminal case. The Justice Department’s Criminal Division prosecuted it.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. If you have seen that split between the operation and the assurance, our whistleblower experts can help build a case around what you know.

What Evidence Is Needed to Prove Fraud?

For allegations like these, the useful evidence connects the contract representation to the work and what the company knew. The sanctions certification, the materials’ route, the warehouse’s actual construction progress and the later message to the agency answer different parts of that question. The connection to government money is the award those representations allegedly helped secure.

A person arranging freight may know where the materials traveled. Someone involved in warehouse construction may know what was ready when the company described its progress, while a contracting employee may know what the agency was promised. We work with the insider to bring those accounts together around the particular contract and the decisions behind it.

You Know the Route Behind the Promise

If you handled the freight, knew the warehouse’s actual progress or saw an assurance that contradicted the operation, speak to one of our whistleblower experts about the route behind the promise. We build your case with you and bring in defense contractor whistleblower lawyers who understand overseas supply contracts and the records behind them. You have a partner from the first account of the shipment through the pursuit of a recovery.