The Kuwaiti logistics firm Public Warehousing Co. - which the Defense Logistics Agency says is the military's prime food supplier in Kuwait, Iraq, and Jordan - is charged with making false statements, submitting false claims, and committing wire fraud, acting U.S. Attorney Gentry Shelnutt said.

The company, also known as Agility, has received more than $8.5 billion in food-supply contracts. Federal prosecutors say its contract with the government is still in effect and scheduled to expire in December 2010.

In a statement, Agility said that it was "surprised and disappointed" by the charges and that it had long cooperated with federal reviews and audits designed to ensure that taxpayer dollars are spent appropriately. It said the government had consistently found the company's prices to be "fair and reasonable."

The six-count indictment alleges that the company manipulated a complex funding formula to defraud the U.S. government of at least $68 million, Assistant U.S. Attorney Barbara Nelan said. But she said the total could grow far beyond that sum because the investigation was ongoing.

The indictment says the company provided false invoices and statements to a logistics center, bought high-priced food items, then knowingly inflated prices. And it said the company received rebates and discounts from vendors that it did not pass on to the government as required.

It also inflated fees by asking vendors to manipulate the way the products were packed, prosecutors said.

The alleged scheme was first outlined in a civil whistle-blower complaint filed by Kamal Mustafa Al-Sultan, general manager of a contracting firm that partnered with Public Warehousing Co. in 2002 to submit a bid on a contract.

Agility, which is scheduled to make a first court appearance Friday, could face probation and a fine of up to twice the company's illegal gains or twice the loss to the United States.