Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Armor Group North America and Its Affiliates Pay $7.5 Million to Resolve False Claims Act Allegations

Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, July 7, 2011

WASHINGTON – Armor Group North America Inc. (AGNA) and its affiliates have paid the United States $7.5 million to resolve allegations that AGNA submitted false claims for payment on a State Department contract to provide armed guard services at the U.S. Embassy in Kabul, Afghanistan, the Justice Department announced today.

The settlement resolves U.S. claims that in 2007 and 2008, AGNA guards violated the Trafficking Victims Protection Act (TVPA) by visiting brothels in Kabul, and that AGNA’s management knew about the guards’ activities.

The settlement also resolves allegations that AGNA misrepresented the prior work experience of 38 third country national guards it had hired to guard the Embassy, and that AGNA failed to comply with certain Foreign Ownership, Control and Influence mitigation requirements on the embassy contract, and on a separate contract to provide guard services at a Naval Support Facility in Bahrain.

 

The settlement resolves a whistleblower suit filed in the U.S. District Court for the District of Columbia. The lawsuit was initially filed under seal by James Gordon against AGNA, ArmorGroup International plc, G4S plc and Wackenhut Services Inc. under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals, called “relators”, to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. Mr. Gordon will receive $1.35 million of the settlement proceeds. During 2007 and early 2008, Mr. Gordon was employed by AGNA, as its director of operations.

 

The case remained under seal to permit the United States to investigate the allegations and determine whether it would join the lawsuit. Under the False Claims Act, the United States may recover three times the amount of its losses, plus civil penalties. On April 29, 2011, the

United States joined the suit.

 

“These contracts are put in place to provide essential support to personnel who are serving in our missions overseas,” said Tony West, Assistant Attorney General for the Civil Division. “The Department of Justice will actively pursue its legal remedies where contractors falsely claim taxpayer dollars for services that fall short of material requirements in their government contracts.”

“Americans deserve to know that their tax dollars are being spent wisely and consistent with our values,” said U.S. Attorney Ronald C. Machen Jr. “Our office has targeted government contractors who fail to meet their obligations to the American people. With this settlement, the U.S. Attorney’s Office for the District of Columbia has now recovered more than $140 million in False Claims Act cases so far this year.”

 

“The Department of State appreciates the work done by the Department of Justice and the Office of the Inspector General in bringing this case to resolution. The Department of State takes any allegation of contractor misconduct seriously and works as part of the inter-agency community to ensure it is adjudicated properly,” said Ambassador Eric J. Boswell, Assistant Secretary of State for Diplomatic Security.

 

The Deputy Inspector General for the Department of State, Harold Geisel, said, “We’re pleased with the successful resolution of this case, and I commend the dedication of our OIG investigators. Our efforts should reinforce to American taxpayers that oversight of their tax dollars is taken seriously.”

 

Assistant Attorney General West and U.S. Attorney Machen thanked the joint investigation team, which includes Special Agents with the Department of State Office of Inspector General, and representatives from the Department of State and the Department of the Navy, for their efforts in the investigation of this matter.

See the original at the Dept of Justice

July 7, 2011 Posted by | Uncategorized | , , , , , , , , | 1 Comment

Federal Judge Denies Defendants ArmorGroup’s and Wackenhut’s Motions to Dismiss False Claims Act Whistleblower Lawsuit Involving Fraudulent Practices at the U.S. Embassy in Kabul

ALEXANDRIA, Va., Aug. 27/ Judge James Cacheris of the United States District Court for the Eastern District of Virginia has denied Defendants ArmorGroup North America (“AGNA”), ArmorGroup International, Wackenhut Services, Inc., and Cornelius Medley’s motions to dismiss whistleblower James Gordon’s lawsuit brought under the False Claims Act.

On September 9, 2009, Mr. Gordon, former Director of Operations of AGNA, filed a whistleblower retaliation lawsuit under the False Claims Act in United States District Court for the District of Columbia, charging that ArmorGroup management retaliated against him for whistleblowing, internally and to the United States Department of State (“DoS”), about illegalities committed by ArmorGroup in the performance of AGNA’s contracts with the United States to provide security services at the U.S. Embassy in Kabul, Afghanistan and at the U.S. Naval base in Bahrain.

The Complaint charges that during Mr. Gordon’s seven-month tenure as Director of Operations, he investigated, attempted to stop, and reported to DoS a myriad of serious violations committed by ArmorGroup, including:

  • Severely understaffing the guard force necessary to protect the U.S. Embassy;
  • Allowing AGNA managers and employees to frequent brothels notorious for housing trafficked women in violation of the Trafficking Victims Protection Act;
  • Endangering the safety of the guard force during transport to and from the Embassy by attempting to substitute company-owned subpar, refurbished vehicles from Iraq rather than purchasing armored escort vehicles as promised to DoS;
  • Knowingly using funds to procure cheap counterfeit goods from a company in Lebanon owned by the wife of AGNA’s Logistics Manager; and
  • Engaging in practices to maximize profit from the contract with reckless disregard for the safety and security of the guard force, the U.S. Embassy, and its personnel

In his Memorandum Opinion (August 27, 2010), Judge Cacheris noted that “Plaintiff alleges and Defendants offer no facts to dispute that Defendants … began to try to constructively discharge [Mr. Gordon] by ‘making [his] working conditions intolerable.'”  Judge Cacheris further noted that “Plaintiff alleges, and Defendants have not offered any evidence refuting the fact, that [Defendant] Medley excluded Plaintiff from management meetings, shunned him, and relegated him to a position of persona non grata in the office” and that “Medley made clear to Plaintiff by his behavior, and to other staff members by his direct boasts, that his priority was to force Gordon to quit.”  In denying Defendants’ Motion for Summary Judgment, Judge Cacheris concluded that “there is a genuine issue of material fact regarding the continued nature and duration of the allegedly illegal acts Plaintiff was requested and required to participate in.”  The parties will now proceed into the discovery phase of the litigation.

According to Debra S. Katz, counsel for Mr. Gordon, “this is an important victory for conscientious employees, like Mr. Gordon, who blow the whistle on fraudulent practices by defense contractors and wind up then paying the ultimate price.  The court’s decision today makes clear that such employees can bring federal claims under the False Claims Act to obtain redress.”

Debra S. Katz and Lisa Banks, attorneys at Katz, Marshall & Banks, LLP, along with Janet Goldstein and Robert Vogel at Vogel, Slade & Goldstein, LLP, represent James Gordon.

Judge Cacheris’ opinion is available at http://www.kmblegal.com/2010/08/27/court-denies-summary-judgment-in-false-claims-act-whistleblower-retaliation-suit-by-kmb-client-james-gordon-against-afghanistan-defense-contractor-armorgroup/.

August 28, 2010 Posted by | Afghanistan, ArmorGroup, Civilian Contractors, Contractor Oversight, G4S, Ronco, State Department, Wackenhut, Whistleblower | , , , , , , , , , , | Leave a comment