A British contractor will plead guilty to conspiracy to defraud the US, the government of Iraq, JP Morgan Chase Bank and the Coalition Provisional Authority that governed Iraq from April 2003 to June 2004.

APTx Vehicle Systems was accused of trying to draw down on letters of credit (L/Cs) arranged to purchase vehicles purportedly made by the company even though they had not been built.

Vehicles for Iraq

In August 2004, the British firm entered into a contract valued at over US$8.4 million to supply 51 vehicles to the Iraqi Police Authority.

US officials alleged that APTx submitted fraudulent shipping documents intended to convince JP Morgan that the L/C terms had been met and the company could draw down on the L/Cs.

False documents

These documents falsely and fraudulently asserted that the 51 vehicles specified on the documents had been made and were ready to ship to Iraq.

The fraudulent shipping documents also listed a company as the freight carrier even though it was not and cited a fictitiously named freight forwarder.

APTx agreed to pay a criminal fine of US$1 million in respect of this matter.

Related agreement

In a related civil settlement agreement, APTx, along with UK-incorporated Alchemie Group Ltd and one of its directors and shareholders agreed to pay US$2 million to the US.

This resolves claims originated by an individual retained by the prime contractor to oversee transportation of the vehicles.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.