TUESDAY, AUGUST 7, 2012 FBI Version
*_ACADEMI / BLACKWATER CHARGED AND ENTERS_*
*_DEFERRED PROSECUTION AGREEMENT_*__
RALEIGH, N.C. — U.S. Attorney Thomas G. Walker announced the unsealingof a bill of information and deferred prosecution agreement (DPA) involving Academi LLC, formerly known as Blackwater Worldwide and Xe Services, LLC (Academi / Blackwater). The bill of information and DPA were unsealed today in U.S. District Court in New Bern, N.C., during proceedings before the Honorable Louise W. Flanagan, U.S. District Judge. In the agreement, the company admits certain facts set forth in a bill of information and agrees to a $7.5 million fine. The agreement also acknowledges and references a $42 million settlement between the company and the Department of State as part of a settlement of
violations of the Arms Export Control Act and the International Trafficking in Arms Regulations.
“Today’s proceedings conclude a lengthy and complex investigation into a company which has provided valuable services to the United States Government, but which, at times, and in many ways, failed to comply with important laws and regulations concerning how we as a country interact with our international allies and adversaries,” said U.S. Attorney Walker. “Compliance with these laws is critical to the proper conduct of our defense efforts and to international diplomatic relations. This prosecution is an important step to ensuring that our corporate citizens comply with these rules in every circumstance.”
IRS-Criminal Investigation Special Agent in Charge Jeannine A. Hammett stated, “High-ranking corporate officials hold positions of trust not only in their companies but also in the eyes of the public. That trust is broken when such officials abuse their power and commit crimes to line their own pockets. An international fraud of this magnitude requires a coordinated effort among law enforcement agencies to stop those involved from profiting from their wrongdoing.”
“Compliance with the firearms laws of the United States in both domestic and international commerce is essential to maintaining order and accountability,” stated ATF Special Agent in Charge Wayne L. Dixie. “Whether it is an individual or a corporation, we will enforce the provisions of the federal gun laws equally. If violations are discovered, we will move to hold those responsible for the violations accountable for their actions.”
“Blackwater profited substantially from Department of Defense (DoD) contracts in support of overseas contingency operations over the past decade,” commented Special Agent in Charge John F. Khin, Southeast Field Office, Defense Criminal Investigative Service (DCIS). “This investigation showed that no contractor is above the law, and that all who do business with the DoD will be held accountable. With this agreement, Blackwater acknowledged their wrongdoing, and took steps to remedy and mitigate the damage they caused to the United States and the public trust.”
“For an extended period of time, Academi / Blackwater operated in a manner which demonstrated systemic disregard for U.S. Government laws and regulations. Today’s announcement should serve as a warning to others that allegations of wrongdoing will be aggressively investigated,” said Chris Briese, Special Agent in Charge of the Charlotte Division of the FBI.
“This company clearly violated U.S. laws by exporting sensitive technical data and unauthorized defense services to a host of countries around the world,” said Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Atlanta. “In doing so, company employees were frequently in possession of illegal firearms and aided other foreign nationals in the acquisition of illegal firearms. HSI is proud to have played a role in assisting the investigation to call this company to account for its actions.” Nicholson oversees HSI activities in Georgia and the Carolinas.
DOJ U.S. Army Reserves Sergeant Pleads Guilty to Conspiracy to Defraud the United States Related to Contracting in Support of Iraq War
Department of Justice Office of Public Affairs February 14, 2012
WASHINGTON – A sergeant in the U.S. Army Reserves pleaded guilty today to one count of conspiracy to defraud the United States for receiving money from a local contractor in return for preferentially processing its invoices for payment outside of the proper procedures and protocols, announced Assistant Attorney General Lanny Breuer of the Justice Department’s Criminal Division.
Sergeant Amasha M. King, 33, of Forsyth, Ga., pleaded guilty before U.S. District Judge Marc T. Treadwell in Macon, Ga., to criminal information charging her with one count of conspiracy to defraud the U.S. Department of Defense (DoD).
According to the court documents filed in the Middle District of Georgia, Sergeant King served at Camp Arifjan, Kuwait, from November 2004 to February 2006, in support of Operation Iraqi Freedom as part of the 374th Finance Battalion. While in Kuwait, King was responsible for receiving and processing pay vouchers and invoices from military contractors for various contracts and blanket purchase agreements (BPAs), including BPAs for bottled potable water. A BPA is a type of contract by which the DoD agrees to pay a contractor a specified price for a particular good or service. With King’s approval, the contractors were paid from the finance battalion, and in some instances, King was responsible for the issuance of U.S. government checks to those contractors.
According to the court documents, King agreed to receive money from a military contractor in return for defrauding the United States by preferentially processing the contractor’s invoices outside of the proper procedures and protocols for payment. This allowed the contractor to be paid much faster than usual and ultimately to bid for more contracts than it otherwise could have financed.
Blog of the Legal Times August 26, 2011
The U.S. Justice Department wants a federal appeals court in Washington to overturn a judge’s ruling that said an American contractor detained in Iraq can sue former Defense Secretary Donald Rumsfeld for alleged abuses.
U.S. District Judge James Gwin this month ruled for the contractor, an American civilian and former Army veteran who provided translation services to the military in Iraq in 2004 and 2005. Gwin said Rumsfeld is not entitled to qualified immunity. The judge’s decision is here.
The contractor, whose name is confidential in the suit in Washington federal district court, “has a right to be free from conduct and conditions of confinement that shook the conscience,” Gwin said.
Gwin of Cleveland federal district court took over the case in January 2010 from Judge Colleen Kollar-Kotelly of U.S. District Court for the District of Columbia. Gwin is sitting by designation in Washington to hear the suit, filed in 2008.
A Justice Department lawyer, James Whitman of the Civil Division’s torts branch, said in a court filing (PDF) this week that Rumsfeld is entitled to the interlocutory appeal because Gwin rejected Rumsfeld’s qualified immunity argument
U.S. insurer faces criminal probe over Iraqis’ unpaid death benefits
An administrative law judge has referred a U.S. insurance company for criminal investigation after the firm failed to pay benefits owed to survivors of Iraqi translators killed while working for the American government.
Under a federally funded program, Chicago-based CNA Financial Corp. provides insurance coverage to contractors killed or injured while working overseas for the United States. The slain translators were helping to train Iraqi police recruits.
Instead of paying out benefits, however, CNA withheld information from the federal government and avoided making payments to nine families who lost relatives in a 2006 attack, according to court files and interviews. One widow lost her home, unable to keep up payments after her son and other translators were ambushed by insurgents in the southern city of Basrah, one of her attorneys said.
In a ruling this week, administrative law Judge Daniel Solomon ordered CNA to begin making payments to the families. In an unusual move highlighting the government’s concern over potential fraud, the judge also told the Labor Department, which oversees the program, to investigate whether the insurance carrier should face criminal charges. A Labor spokesman said the agency would “fully investigate” the allegations to determine whether to ask the Justice Department to prosecute the case.
CNA said it was also looking into the case.
“We are investigating the matter and will take all appropriate actions,” said Katrina Parker, a company spokeswoman.
Attorneys for the families said they believe CNA withheld documents to avoid making payments.
CNA’s failure to pay out benefits underscores the continuing problems with the Defense Base Act, essentially the workers compensation system for overseas federal contractors.
The system was little-used until the wars in Iraq and Afghanistan sent hundreds of thousands of private contractors onto the battlefield. All told, the government has paid out nearly $1.5 billion in premiums since 2001.
Reporting in 2009 by ProPublica, the Los Angeles Times and ABC’s 20/20  revealed deep flaws in the program. Workers fought long battles for medical care, including such things as prosthetic devices and treatment for post-traumatic stress disorder. Foreign workers, including Iraqi and Afghan translators, often did not receive payments or treatment. The Labor Department seldom took action to enforce the law. One official called the system a “fiasco.”
Congress subsequently held hearings  that showed that American insurers were reaping large profits from the program. Documents showed that CNA reported the highest profits margins, taking in nearly 50 percent more in premiums than it paid out in benefits.
The case decided this week began on Oct. 29, 2006, when insurgents boarded a bus and killed 17 Iraqi-born translators working in Basrah for Sallyport Global Services, a logistics and security contractor. The insurgents later scattered their bodies around the city.
Under the law, CNA was responsible for paying death benefits to the translators’ dependents. CNA paid when translators had children and spouses, according to interviews and court records, but not to other survivors. Several translators had no children, but supported parents or other family members.
In such cases, the Labor Department demands proof that survivors relied on contractors’ earnings. CNA hired investigators who interviewed nine families, confirmed their eligibility, and even set up bank accounts. But CNA withheld portions of the investigators’ findings when it submitted the claims to the Labor Department, court records show.
One CNA file shows that the slain translator had supported his mother, a widow, since his father was killed in the Iraq-Iran war. The town council even issued a statement of support, confirming the translator was his mother’s “sole provider.” Another CNA file shows that another translator killed in the ambush was sole support for his family, which “could be described as very poor.”
But those pages were missing from the information CNA submitted to the Labor Department. As a result, Labor officials accepted CNA’s declaration that there were no dependents to pay in any of the nine cases.
The translators’ attorneys at Cohen Milstein, a well-known Washington firm doing pro bono work on the case, estimated that CNA owed a total of about $500,000 to the nine families. Instead, CNA paid about $45,000 into a special federal fund set up to help support the workers compensation system.
The company subsequently recovered some of that money plus additional fees under an obscure law—the War Hazards Compensation Act—that allows insurance carriers to recoup costs for contractors killed in hostile acts, court documents show.
In one case, CNA paid $5,000 into the special fund and $518 to a translator’s family for burial expenses, but was reimbursed $9,289 by the federal government for investigating and handling the claims.
A Sallyport official said the company believed that CNA had made payments to all of the translators’ families except one, which declined to accept money because of security concerns.
In an emailed statement, the company declined further comment due to the litigation. It said it would “continue to monitor the situation and support the families within our remit.”
WASHINGTON – March 16, 2011 – In response to a pending lawsuit from Kellogg Brown & Root Services Inc. (KBR) in the U.S. Court of Federal Claims, the Department of Justice has filed counterclaims alleging that KBR managers had received kickbacks from a dining facility subcontractor in violation of the False Claims Act and the Anti-Kickback Act. The subcontractor was retained in connection with KBR’s contract with the U.S. Army to provide logistical support to the military in Iraq and elsewhere. The counterclaims also allege that the kickbacks should cause KBR to forfeit its claims against the United States and to return money paid by the United States as reimbursement to KBR upon the tainted subcontract.
The counterclaims assert that, from late 2002 through 2003, Terry Hall, who was KBR’s regional food services manager for Iraq and Kuwait, and his deputy, Luther Holmes, received more than $45,000 in kickbacks from Mohammad Shabbir Khan, vice president of Tamimi Global Company. Khan provided the kickbacks to ensure that Tamimi was treated favorably by KBR. Hall and Holmes used their positions to advocate on behalf of Tamimi, and, during the time that they received the kickbacks, KBR awarded Tamimi subcontracts worth more than $400 million. Other KBR managers knew of apparent irregularities involving the Tamimi subcontracts, but approved them anyway.
Law360, New York (March 16, 2011) — The U.S. Department of Justice has opened an investigation into the case of Raymond Davis, the newly-freed CIA contractor who shot and killed two Pakistani men in January, a U.S. official said Wednesday.
Cameron Munter, the U.S. Ambassador to Pakistan, confirmed the probe in a statement on the heels of news that Davis had been released from a jail in Lahore after the families of the victims agreed to pardon him.
Without giving further details of the investigation, Munter said he was grateful for the generosity of the families, who each reportedly received between $700,000 and $1 million in so-called “blood money” as part of the deal to free Davis.
“I wish to express, once again, my regret for the incident and my sorrow at the suffering it caused,” he said. “Most of all, I wish to reaffirm the importance that America places in its relationship with Pakistan, and the commitment of the American people to work with their Pakistani counterparts to move ahead in ways that will benefit us all.”
Following his release from two months of detention, Davis was flown to Kabul, Afghanistan, to meet with U.S. officials, the Washington Post reported.
The source of the families’ payouts remained unclear Wednesday, with Secretary of State Hillary Clinton telling reporters in Cairo that the U.S. government was not behind the compensation, according to Reuters.
The Justice Department’s appeal of the dismissal of charges in the Blackwater manslaughter prosecution in Washington is in its infancy, but there are already signs of just how heated the appeal will be as the government tries to salvage the case.
Yesterday, the Justice Department filed under seal its draft of a 34,000-word brief, far longer than the U.S. Court of Appeals for the D.C. Circuit typically permits. The defense lawyers for the accused guards argue the government should be limited to 18,000 words.
The defense lawyers, including Steptoe & Johnson’s Bruce Bishop, said today in court papers in the D.C. Circuit that the DOJ’s “oversize draft was neither solicited by the court nor permitted by the rules.” The DOJ is appealing a trial judge’s ruling that the government improperly used compelled statements in securing an indictment against the former security guards.
But Bishop doesn’t just slam DOJ for allegedly skirting circuit rules.
The defense lawyers charge that the government is presenting a new argument for the first time on appeal: that the evidence against the guards, charged with killing 17 unarmed Iraqi civilians in a shootout in Baghdad, is so overwhelming that any violation of the use of compelled statements is harmless.
Bishop also said the government is writing at length in part to “vindicate the prosecutors’ reputations” against allegations the government investigated and prosecuted the case recklessly
May 5 (Bloomberg) — KBR Inc., the Army’s largest contractor in Iraq, was picked for a no-bid contract worth as much as $568 million through 2011 for military support services in Iraq, according to Army officials.
The Army announced the new work order only hours after the Justice Department said it will pursue a lawsuit accusing the Houston-based company of taking kickbacks from two subcontractors on Iraq-related work. The Army also awarded the work to KBR over objections from members of Congress, who have pushed the Pentagon to seek bids for further logistics contracts.
The Justice Department said the government will join a lawsuit filed by whistleblowers alleging that two freight- forwarding firms gave KBR transportation department employees kickbacks in the form of meals, drinks, sports tickets and golf outings.
“Defense contractors cannot take advantage of the ongoing war effort by accepting unlawful kickbacks,” said Assistant Attorney General Tony West, in a statement.
KBR will review the litigation when it is received and “will continue to cooperate with the government,” company spokeswoman Heather Browne said in an e-mail. “Gifts of dinners, baseball tickets and similar items would violate KBR policies and KBR was not aware of these violations.”
KBR will continue to provide services such as housing, meals, laundry, showers, water purification and bathroom cleaning under the new order, which was placed under a military contract KBR won in late 2001, shortly after the U.S. invaded Afghanistan.
The Army has “reviewed the government’s notice to intervene” in the whistleblower lawsuit, Army spokesman Dan Carlson said. “We feel we have appropriate safeguards in place” to protect the government’s interests.
The no-bid work order is unusual because the Army, at the insistence of Congress, has since April 2008 put all logistics orders to bid, pitting KBR against Falls Church, Virginia-based DynCorp International Inc. and Irving, Texas-based Fluor Corp.
The Army didn’t put the work out for bids because U.S. commanders in Iraq advised against it, saying that enlisting a new company would be too disruptive, Army program director Lee Thompson said in an interview before the Justice Department action was announced. The U.S. force in Iraq is scheduled to shrink from 94,000 troops today to 50,000 by August, with a complete withdrawal by December 2011.
The Army, in a statement, said putting to bid an order for 18 months’ work, and making the transition to a new contractor, would cost at least $77 million. The KBR work order will be awarded by Aug. 31, said Mike Hutchison, deputy director of Army logistics contracting.
The lawsuit is the second government action this year against KBR. The U.S. sued the company on April 1, alleging that it used private armed security guards in Iraq between 2003 and 2006 in violation of its Army contract and then improperly billed for their services.
Before today’s Justice Department announcement, the Army had said in an e-mailed statement that it was aware of the April lawsuit and would use “additional oversight measures to ensure only reasonable, allowable costs are paid” under the new work order.
The new lawsuit, filed in a Texas federal court, was based on information from two whistleblowers who work in the air cargo industry, the Justice Department statement said. The whistleblowers can get a portion of any money the Justice Department obtains in the case.
KBR’s no-bid work order drew criticism from Congress even before it was announced.
Senator Claire McCaskill, the Missouri Democrat who heads a subcommittee that oversees military contracting, and the panel’s ranking Republican, Susan Collins of Maine, wrote to Defense Secretary Robert Gates on April 30 urging the Army against “continued reliance” on KBR in light of the Justice Department’s April lawsuit.
Under the new competitive-bid approach, KBR on March 2 won a one-year, $571 million contract with four option years that, if exercised, could be worth as much as $2.77 billion.
That contract calls for KBR to provide services including transportation and postal operations. DynCorp initially protested the award and then dropped its objections. Original Here
By Brent Kendall
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The Justice Department said Wednesday that it is joining a lawsuit alleging that employees of KBR Inc. (KBR), the prime contractor for logistical support of U.S. military operations in Iraq, took kickbacks from two freight-forwarding companies.
The department alleged that KBR employees accepted meals, drinks and tickets to sports events and golf outings from freight-forwarding companies Eagle Global Logistics and Panalpina Inc., a unit of Panalpina WeltTransport Ltd (PWTN.EB).
The lawsuit was brought under the federal False Claims Act, which provides financial rewards to litigants who report fraud against the government. Original here
-By Brent Kendall, Dow Jones Newswires; 202-862-9222; email@example.com