Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

USDOJ: Maersk Line to Pay Us $31.9 Million to Resolve False Claims Allegations for Inflated Shipping Costs to Military in Afghanistan and Iraq

7th Space January 3, 2012

WASHINGTON – Maersk Line Limited has agreed to pay the government $31.9 million to resolve allegations that it submitted false claims to the United States in connection with contracts to transport cargo in shipping containers to support United States troops in Afghanistan and Iraq, the Justice Department announced today

The government alleges that Maersk, a wholly-owned American subsidiary of Denmark-based A.P. Moller Maersk, knowingly overcharged the Department of Defense to transport thousands of containers from ports to inland delivery destinations in Iraq and Afghanistan.

The government contends that Maersk inflated its invoices in various ways. For example, Maersk allegedly billed in excess of the contractual rate to maintain the operation of refrigerated containers holding perishable cargo at a port in Karachi, Pakistan, and at United States military bases in Afghanistan; allegedly billed excessive detention charges (or late fees) by failing to account for cargo transit times and a contractual grace period; allegedly billed for container delivery delays improperly attributed to the United States government; allegedly billed for container GPS-tracking and security services that were not provided or only partially provided; and allegedly failed to credit the government for rebates of container storage fees received by Maersk’s subcontractor at a Kuwaiti port.

“Our men and women in uniform overseas deserve the highest level of support provided by fair and honest contractors,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “As the Justice Department’s continuing efforts to fight procurement fraud demonstrate, those who put profits over the welfare of members of our military will pay a hefty price.”

The settlement resolves allegations against Maersk that were filed in San Francisco by Jerry H. Brown II, a former industry insider. The lawsuit was filed 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. The relator in this action will receive $3.6 million as his statutory share of the proceeds of this settlement. In 2009, the United States resolved the relator’s allegations against shipping company APL Limited and its parent company for $26.3 million.

“Contractors that submit false claims for monies they are not owed cost the government millions of dollars every year,” said Melinda Haag, United States Attorney for the Northern District of California. “This settlement should send a strong signal that the government is committed to safeguarding taxpayer funds by ensuring that contractors operate ethically and responsibly.”

Please read the entire story here

January 3, 2012 Posted by | Afghanistan, Civilian Contractors, Contractor Corruption, Contractor Oversight, Follow the Money, Government Contractor, Whistleblower | , , , , , , | Leave a comment

Firm once known as Blackwater faces another suit

By MATTHEW BARAKAT  Associated Press  at Blue Ridge Now  July 14, 2011

A current worker and a former employee of the security contractor previously known as Blackwater have filed a whistleblower lawsuit against the company, the second such suit filed against the firm, according to documents unsealed Thursday.

The lawsuit in U.S. District Court alleges that Blackwater, now known as Xe, overbilled the government for work protecting State Department employees in Iraq and Afghanistan. Part of the alleged fraud included billing for sniper services from individuals who were not properly qualified.

Specifically, the lawsuit alleges that Blackwater billed the State Department for sniper services from one individual who sat behind a desk. In at least one other case, the company allegedly billed for services provided by a marksman who had failed a required drug test.

A spokesman for Moyock, N.C.-based Xe declined comment Thursday, citing the pending legal action. The company has denied similar allegations in the past

Please read the details here

July 15, 2011 Posted by | Blackwater, Civilian Contractors, Contractor Corruption, Contractor Oversight, Private Security Contractor, State Department | , , , | 1 Comment

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

Department of Justice
Office of Public Affairs
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

KBR Managers Allegedly Received Kickbacks from Dining Facility Subcontractor

MsSparky at MsSparky.com  March 16, 2011

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 and the .  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, , who was KBR’s regional food services manager for Iraq and Kuwait, and his deputy, , received more than $45,000 in kickbacks from , vice president of Global Company.  Khan provided the kickbacks to ensure that was treated favorably by KBR.  Hall and Holmes used their positions to advocate on behalf of , and, during the time that they received the kickbacks, KBR awarded subcontracts worth more than $400 million.  Other KBR managers knew of apparent irregularities involving the Tamimi subcontracts, but approved them anyway.

Please read the entire post here

Department of Justice Press Release

March 16, 2011 Posted by | Civilian Contractors, Contractor Corruption, Government Contractor, Iraq, KBR, Kuwait | , , , , , , | Leave a comment

Justice joins lawsuit against Defense contractor KBR

See Also at MsSparky with the Complaint

Robert Brodsky at GovExec February 22, 2011

The Justice Department has intervened in a false claims lawsuit against KBR Inc., one of the Defense Department’s largest contractors, claiming the goliath logistics firm made illegal payments to a Turkish subcontractor.

On Friday, the government joined a lawsuit first filed in February 2007 by a KBR whistleblower who claimed the former Halliburton subsidiary violated the False Claims Act in connection with the Army’s third-generation Logistics Civil Augmentation Program contract.

“Contractors hired to provide support to our men and women in uniform must play by the rules,” said Tony West, assistant attorney general for the civil division of the Justice Department. “As we’ve done today, the Justice Department will take action against those whom we believe charge the taxpayers for goods and services that were not provided to American troops.”

Under the mammoth LOGCAP III contract, KBR provides a host of logistics and support services to troops in Iraq, Kuwait and Afghanistan, including meals, water, mail, sanitation, fuel and showers. KBR performs the LOGCAP III contract largely through subcontractorsPlease read the entire article here

February 22, 2011 Posted by | Civilian Contractors, Contractor Corruption, Department of Defense, Halliburton, Iraq, KBR, Whistleblower | , , , , , , | Leave a comment

Attorney Calls for More Prosecutions of Corruption in Defense Contracts

by Adam Klasfeld at Courthouse News

MANHATTAN (CN) – After a federal jury convicted an Army captain of corruption with military contractors in Iraq, an attorney who has spent years on such cases said that such prosecutions are rare – and much needed. “For several years, we were very worried because we just saw a complete lack of any sort of fraud prosecution against defense contractors,” Susan Burke said.
“Given the dollars being spent on both these wars, it’s imperative for the United States to continue to root out fraud,” Burke added.
Burke, who has specialized in cases involving misconduct by contractors and military personnel, has represented victims of torture, abuse and murder at Abu Ghraib prison and Nisour Square in Iraq.
Last year, her Iraqi clients settled seven civil lawsuits alleging “senseless slaughter” by guards of the company formerly known as Blackwater, now operating under the name Xe.
Burke says she still has three active lawsuits against defense contractors CACI and L-3, on behalf of Iraqis who say they were tortured at detention centers in Iraq.
She also has an active suit against Blackwater founder Erik Prince and his entities, on behalf of a married couple who used to work for him. The husband and wife Burke represents sued under the False Claims Act, which allows whistleblowers to sue contractors on behalf of the federal government for fraud.
Burke spoke to Courthouse News after Army Capt. Bryant Williams was convicted of corruption in December. Williams was on active duty at the time.
Burke said she has been trying for years to get the federal government to pursue cases against defense corruption cases more aggressively – to little avail.
“We’ve been following, essentially, the lack of actions by the Department of Justice with regard to the torture issues,” Burke said, “and we keep an eye on the federal prosecutions against defense contractors on the fraud issue.”
The Uniform Code of Military Justice prevents the military from prosecuting corporate employees, leaving the Department of Justice the exclusive authority to prosecute crimes by military contractors, Burke said.

Please read Susan Burkes statements in their entirety here

January 4, 2011 Posted by | Civilian Contractors, Contractor Corruption, Contractor Oversight, Department of Defense, Legal Jurisdictions, Pentagon, Private Military Contractors, Private Security Contractor, Wartime Contracting | , , , , , , , , , | 1 Comment

ACLU Challenge to Secrecy Provisions of Contractor Fraud Law to be Heard in Fourth Circuit Today

False Claims Act gag orders hide Iraq War costs and public safety information.

Richmond, VA–Lawyers for the American Civil Liberties Union will present oral arguments in the Fourth Circuit Court of Appeals tomorrow in a lawsuit challenging the overreaching secrecy provisions of a federal whistleblower law that prevents the public from learning about serious allegations of fraud against the United States government.

Complaints filed under the False Claims Act are automatically placed under seal and those who file them are gagged from speaking, keeping the complaints secret from the public for months and, in some cases, years.

Such complaints include allegations of military contractor fraud during the Iraq War and warnings of ongoing threats to public health and safety.

The ACLU and the ACLU of Virginia filed suit in U.S. District Court in Alexandria in January 2009 on behalf of themselves, the Government Accountability Project (GAP) and OMB Watch.  The government filed a motion to dismiss, which was heard in June 2009.  In August 2009, the district court granted the government’s motion.  The ACLU then appealed to the Fourth Circuit.

The case is ACLU v. Mukasey.  Attorneys on the case are Chris Hansen and Ben Wizner of the ACLU and Rebecca Glenberg of the ACLU of Virginia.

The ACLU’s appellate briefs are available at http://acluva.org/wp-content/uploads/2010/09/4th-circuit-opening-brief.pdf and http://acluva.org/wp-content/uploads/2010/09/Reply-Brief-for-Appellants-ACLU-v.-Holder-2010.2.9.pdf.  The district court complaint is available at http://www.aclu.org/free-speech/aclu-et-al-v-mukasey-et-al-complaint.

September 21, 2010 Posted by | Civilian Contractors, Contractor Corruption, Legal Jurisdictions | , , , | Leave a 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

Recent Iraq Contract Decisions Expand Opportunities and Defenses for Contractors

McKenna, Long, and Aldridge News

Government contractors performing in Iraq or elsewhere overseas may benefit from the holdings and logic of two recent federal court decisions.

In the first decision, the Fourth Circuit Court of Appeals held that a qui tam relator had failed to state a valid False Claims Act (“FCA”) claim against a construction contractor that built the U.S. Embassy in Baghdad, Iraq.

In the second decision, the United States District Court for the Eastern District of Virginia held that a contractor providing brokerage services for the Iraqi Ministry of Defense could pursue a breach of contract claim against the Iraqi government because the Iraqi government was not immune from suit under the Foreign Sovereign Immunities Act (“FSIA”).

Read the entire post here

July 27, 2010 Posted by | Civilian Contractors, Iraq, Legal Jurisdictions | , , , , , | Leave a comment

DOJ Intervenes in Lawsuit Against KBR On Kickbacks

By Brent Kendall

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; brent.kendall@dowjones.com

May 5, 2010 Posted by | Contractor Corruption, KBR | , , , , , , , | Leave a comment

U.S. Sues Kellogg, Brown & Root for Alleged False Claims Act Violations Over Improper Costs for Private Security In Iraq

WASHINGTON, April 1 /PRNewswire-USNewswire/ — The United States has filed a lawsuit against Kellogg Brown & Root Services (KBR) alleging that the defense contractor violated the False Claims Act, the Justice Department announced today. The suit, filed in U.S. District Court in Washington, alleges that KBR knowingly included impermissible costs for private armed security in billings to the Army under the Logistics Civil Augmentation Program (LOGCAP) III contract. The LOGCAP III contract provides for civilian contractor logistical support, such as food services, transportation, laundry and mail, for military operations in Iraq.

The government’s lawsuit alleges that some 33 KBR subcontractors, as well as the company itself, used private armed security at various times during the 2003-2006 time period. KBR allegedly violated the LOGCAP III contract by failing to obtain Army authorization for arming subcontractors and by allowing the use of private security contractors who were not registered with the Iraqi Ministry of the Interior. The subcontractors using private security are alleged to have also violated subcontract terms requiring travel only in military convoys. The government’s lawsuit further alleges that at the time, KBR managers considered the use of private security unacceptable and were concerned that the Army would disallow any costs for such services. KBR nonetheless charged the United States for the costs of the unauthorized services.

“Defense contractors cannot ignore their contractual obligations to the military and pass along improper charges to the United States,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We are committed to ensuring that the Department of Defense’s rules are enforced and that funds so vital to the war effort are not misused.”

This case is being brought as part of a National Procurement Fraud Initiative. In October 2006, the Deputy Attorney General announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by the Assistant Attorney General for the Criminal Division and includes the Civil Division, U.S. Attorneys’ Offices, the FBI, the U.S. Inspectors General community, and a number of other federal law enforcement agencies.

Along with the Justice Department’s Civil Division, the Defense Criminal Investigative Service, Army Criminal Investigation Division and, FBI participated in the investigation of this matter. This case, as well as others brought by members of the task force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

SOURCE U.S. Department of Justice

April 1, 2010 Posted by | KBR, Private Security Contractor | , , , , , , , | Leave a comment

DynCorp Took Uncle Sam for Millions For a Nonexistent Database, Man Says

DALLAS (CN) – A DynCorp International executive says he was fired for complaining that the company charged the State Department millions of dollars for a database that did not exist. The 2004 contract awarded DynCorp $1 million to build a database of Americans trained in law enforcement who were willing to go to Afghanistan or Iraq at a moment’s notice, and $1 million a year to maintain it, Michael Riddle claims in Federal Court.      Riddle claims the database was never built. And he says that “During the last few years of plaintiff’s employment, the fact that the database was a nonentity was commonly discussed in plaintiff’s department.”
He adds that “DynCorp took the State Department’s money and never made a glancing blow toward producing or maintaining any type of database that was required by contract.
“Additionally, senior company executives, such as Aiman Zureikat and Richard Cashon, readily acknowledged that they were using funds that were earmarked as CADRE payments for other company expenses, such as recruiting.”
Riddle, who began as a technical adviser, says he was a senior employment manager when he was fired after voicing concerns about possible criminal consequences for using his work to fool the government.
Riddle says he kept his own database to track recruits sent to the Police Assessment, Selection and Training facility in Fredericksburg, Va. He tracked how many people washed out, and why, and who advanced out of the facility, according to his complaint.
In 2007, Riddle says, the State Department demanded use of the database. He adds that in 2008, his bosses at DynCorp approached him about using his personal database, and pawning off his work as work that was supposed to have been done for the government’s database.
“When plaintiff protested, plaintiff was reminded that plaintiff needed to be a team player,” his complaint states.
Riddle says he “has since learned that a responsible party at the State Department allowed DynCorp to avoid its contractual obligation to create the database. On information and belief, the State Department advised DynCorp that any data that it could cobble together would be sufficient to constitute compliance.”
Riddle claims that this “scheme was designed to (1) cover up DynCorp’s fraud in failing to do anything toward creation of the database; (2) as well as calculate to provide ‘cover’ for the State Department employee who had allowed the database project to languish and essentially become either impossible or impracticable to reconstruct.”
Riddle seeks damages for retaliation under the False Claims Act. He is represented by Steve Kardell with Clouse Dunn Khoshbin of Dallas.

March 22, 2010 Posted by | DynCorp, State Department | , , , , , | Leave a comment