US Foodservice pays $30 million to settles contract dispute with federal government

US Foodservice pays $30M to settle contract claims

ROSEMONT, Ill. — U.S. Foodservice Inc. has agreed to pay $30 million to settle claims that it overcharged the federal government.

U.S. Foodservice supplied food under federal contracts for the Department of Defense and U.S. Department of Veterans Affairs.

The Department of Justice claims the company, between 2000 and 2005, used shell companies to inflate the price of goods under this contract that were “resold” to U.S. Foodservice and as a result received millions of dollars to which it was not entitled.

“Skimming money off the top of valuable government contracts cheats all of us,” Preet Bharara, U.S. Attorney for the Southern District of New York, said in a statement.

The company denies any wrongdoing.

U.S. Foodservice, which provides food to restaurants, hospitals, schools, hotels, government entities and other establishments, is jointly owned by Clayton, Dubilier & Rice, LLC and Kohlberg Kravis Roberts & Co.