Associated Press at The Blaze November 20, 2012
The U.S. government has filed a civil lawsuit accusing a Houston-based global construction company and its Kuwaiti subcontractor of submitting nearly $50 million in inflated claims to install live-in trailers for troops during the Iraq War.
The lawsuit names KBR Inc. and First Kuwaiti Trading Co., alleging they overcharged for truck, driver and crane costs, and misrepresented delays in providing around 2,250 trailers meant to replace tents used by soldiers earlier in the invasion.
In one instance, the contractors allegedly claimed they paid $23,000 to lease one crane per month when the actual price was about $8,000, according to the lawsuit, which was filed this week in U.S. District Court in Rock Island, Ill., and first appeared in federal court records Tuesday.
KBR, once the engineering and construction arm of Halliburton, has faced lawsuits before related to its work in Iraq. One of the most prominent involved a soldier electrocuted in his barracks shower at an Army base. That case was eventually dismissed.
In the case involving the trailers, Jim Lewis, the U.S. Attorney for the Central District of Illinois, said “KBR and First Kuwaiti did not provide an honest accounting.”
Stuart Delery, a U.S. deputy assistant attorney general, said in a Department of Justice statement regarding the lawsuit that contractors “are not permitted to profit at the expense of the taxpayers at home who are supporting our men and women in uniform.”
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.
The Justice Department plans to bring a new indictment against four Blackwater Worldwide guards involved in a 2007 shooting that killed 17 Iraqis.
U.S. District Judge Ricardo Urbina had thrown out the case in 2009, but an appeals court reinstated the charges last year.
Urbina, who has since retired, said prosecutors built their case on sworn statements the guards had given under a promise of immunity.
A Justice Department attorney told Judge Royce Lamberth on Wednesday that a special team will ensure that prosecutors working on the new indictment don’t have access to “privileged statements.” Prosecutors say they will seek a superseding indictment after gathering additional evidence.
The guards are accused of opening fire in a crowded Baghdad intersection in 2007.
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
At Blog of the Legal Times April 22, 2011
The U.S. Department of Justice announced this afternoon that it has settled a whistleblower lawsuit against two companies under contract with the U.S. Department of State.
DynCorp International LLC and its subcontractor, The Sandi Group (TSG), were sued by two former TSG employees in a qui tam lawsuit under the federal False Claims Act.
In the settlement, DynCorp will pay $7.7 million and TSG will pay $1.01 million, according to the DOJ release. The two former TSG employees will also receive a share up to $481,710.
A copy of the lawsuit filed against the two companies was not immediately available this afternoon, but according to the DOJ release, DynCorp was accused of inflating claims made to the government for construction costs, while TSG was accused of seeking reimbursement for danger pay that it had never actually paid out to U.S. employees working in Iraq.
“The hard work of stabilizing Iraq is challenging enough without contractors and subcontractors inflating the cost of rebuilding by making false claims at taxpayers’ expense,” Tony West, Assistant Attorney General for the Civil Division, said in the DOJ release. “This case demonstrates that the Department of Justice will pursue these cases that undermine the integrity of our public contracting process.”
Stuart Bowen Jr., the Special Inspector General for Iraq Reconstruction said in a statement that “false claims filed by contractors have been a problem in Iraq.”
A federal appeals court in Washington closed its doors to the public this morning to hear arguments in the government’s effort to salvage the manslaughter prosecution of a group of former Blackwater security guards who are charged with killing unarmed civilians in Iraq.
Justice Department appellate lawyer Demeta Lambros said before the U.S. Court of Appeals for the D.C. Circuit today that the case should be heard in a closed session. A lawyer representing the guards, Bruce Bishop, of counsel with Steptoe & Johnson LLP in Washington, agreed with the government’s position.
Lambros said in court, before the hearing was sealed, that an open session would run the risk of disclosing grand jury information and revealing statements from the guards that are protected.
At issue in the case is the extent to which Justice Department prosecutors misused protected statements the guards made after the fatal shooting in Baghdad’s Nisour Square in 2007. The lawyers in the case filed public, redacted briefs in the D.C. Circuit. The court papers reveal discord between the prosecutors assigned to the case and the government’s “taint” attorney, Raymond Hulser, whose job was to screen protected information to make sure it didn’t reach the trial team.
In recent court papers, Justice attorneys had urged the appeals court to keep open the oral argument session and only close it if needed. Lambros said today the position of the government had changed. She didn’t offer an explanation. Assistant Attorney General Lanny Breuer and several of his front-office lawyers were in court this morning for the closed session.
Judges Merrick Garland and Douglas Ginsburg, sitting with Senior Judge Stephen Williams, ordered the court hearing closed.
Judge Ricardo Urbina of Washington’s federal trial court dismissed the government’s prosecution in December 2009 following a series of hearings in which the guards and prosecutors testified. The guards testified they were under the impression they would be fired if they did not provide statements about the shooting.
“And it was your understanding you were supposed to respond to their questions?” Steptoe partner Mark Hulkower asked a guard, Paul Slough, according to a transcript. (Hulkower died this month of cancer. The BLT has more on Hulkower’s career here.)
“Yes, sir,” Slough responded.
“Did you believe that you had a choice as to whether you responded?” Hulkower continued.
Slough said he was told that if he were “honest and truthful, that nothing would be used against me, and that they were there to gather information not to be used in a criminal setting.”
Another guard, Evan Liberty, testified that it was understood he would be fired if he didn’t talk to investigative agents.
“But the agents didn’t tell you that, did they?” asked Michael Dittoe of DOJ’s National Security Division.
“They didn’t have to, sir,” Liberty responded. “I understood it.”
DOJ lawyers in court papers acknowledged the government made mistakes in building the criminal prosecution. The prosecutors believed they were entitled to know what the guards said before they gave their sworn statements, Lambros said in court papers filed last June in the D.C. Circuit. The prosecution team was “unaware the taint attorney had recommended a different course,” according to Lambros.
“This, in the government’s view, is a case about a group of private security guards who recklessly and unjustifiably opened fire in a crowded Baghdad square, leaving 14 innocent Iraqi civilians dead and another 20 wounded,” Lambros said. “It is also a case about the difficulty of bringing them to justice.”
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; firstname.lastname@example.org