Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

Judge Denies Blackwaters Motion for Arbitration

Law Offices of Scott J Bloch  May 23, 2012

WASHINGTON, DC (May 23, 2012) – Blackwater Industries, which changed its name to Xe Services, and now has changed it yet again to Academi LLC, lost its initial bid to have the $240 million suit for employee misclassification sent to arbitration and dismissed from federal court in Washington, D.C.

Scott Bloch filed an amended complaint (see link above) in the class action lawsuit on behalf of four former security specialists, who were injured while working for Blackwater, in order to recover their payment of social security, unemployment insurance, and unpaid benefits and state and local withholding and unemployment insurance, and other unspecified damages. The action seeks $240,000,000 in damages for lost benefits, overtime, treble damages and punitive damages, as well as additional amounts as proved for the class of specialists.

The court has rejected that motion filed by Blackwater and required it to file another motion to determine if the same Plaintiffs agreed to have an arbitrator determine if the agreements were unconscionable, procured by duress, fraud and undue influence.

“Blackwater acted illegally and unconscionably toward these brave individuals,” said Bloch. ”Through their fraud as pointed out in the Amended Complaint, they avoided overtime for security workers who worked sometimes 12-16 hours a day 6 days a week. They were forced to sign agreements they never read and were not given time to read and not given copies, which took away valuable rights and were unlawful in their terms. Now the court has rejected their initial motion and required Blackwater to seek the same relief if they can prove that the Plaintiffs who never were allowed to read the original agreements agreed to have an arbitrator determine whether they properly agreed to anything. We continue to assert the illegality of the agreements and the actions of Blackwater.”

Read Xe’s Arbitration Bid Denied in Misclassification Suit here.

May 23, 2012 Posted by | Blackwater, Civilian Contractors, Contractor Corruption, Contractor Oversight, Defense Base Act, Lawsuits, Legal Jurisdictions | , , , , , , , , , , | Leave a comment

Statement Concerning Filing of Amended Class Action Tax Misclassification Against Xe Services (formerly Blackwater) on Behalf of Personal Security Specialists for Loss of Benefits and Withholding, Expenses, Penalties, and Treble Damages

Washington DC September 21, 2011

Scott Bloch files Amended Complaint against  Blackwater on behalf of thousands of former employees for unlawful, fraudulent and unconscionable treatment of employees in fraudulent misclassification as independent contractors

Since 2007, Blackwater Industries, which has changed its name to Xe Services, has employed over 10,000 personal security specialists to perform operations in Iraq and Afghanistan under lucrative contracts with departments of the United States Government including the State Department and CIA. While employing these individuals, many of whom are decorated veterans of the armed services including Special Forces, Army Rangers, Navy Seals, Blackwater sought to avoid millions of dollars in taxes, withholding, and payments of benefits to these employees by classifying them improperly as independent contractors.

Yesterday, Scott Bloch filed an amended complaint in the class action lawsuit on behalf of four former security specialists, who were injured while working for Blackwater, in order to recover their payment of social security, unemployment insurance, and unpaid benefits and state and local withholding and unemployment insurance, and other unspecified damages. The action is brought on their own behalf and thousands of others who have worked for Blackwater and its newly named Xe Services. The action seeks $240,000,000 in damages for lost benefits, overtime, treble damages and punitive damages, as well as additional amounts as proved for the class of specialists.

The suit also states that one of the representative plaintiffs already had a determination from the IRS that Blackwater misclassified him as an independent contractor. “The IRS already determined in the case of one of my clients that he should have been classified as an employee,“ said Bloch. “Now thousands of people will have to file amended returns. Thousands of people will likely be entitled to benefits they were denied due to the misclassification, including payment of their employer share of pension, health and disability insurance premiums, and other plans that Blackwater filed with the government for its employees, promising it would not discriminate against those employees as they did here.”

“Blackwater made hundreds of millions of dollars from taxpayers and hired thousands of former veterans of military service and police officers. They also had in their ranks Federal Agents, such as current employees of the FBI on leave of absence. They were hired as security specialists in Iraq and Afghanistan,” said Bloch. “It is a grave injustice to them who were mistreated and left without any health insurance or other benefits for their families, and left to fend for themselves in paying into Social Security and Medicare. They laid down their lives to protect dignitaries and carry out duties in support of wars for America, and they deserve better than this. Many of these same men risked their lives to protect everyone from the President of the United States to U.S. Senators, Congressman, U.S. Diplomats, to Foreign Presidential & Diplomatic Figures in one of the most dangerous places on the planet.”

One of the Plaintiffs guarded such dignitaries as the just assassinated Former Afghan President Burhanuddin Rabbani as well as current Secretary of State and then Senator Hillary Clinton.

“Blackwater acted illegally and unconscionably toward these brave individuals,” said Bloch. ”Through their fraud as pointed out in the Amended Complaint, they avoided overtime for security workers who worked sometimes 12-16 hours a day 6 days a week. They were forced to sign agreements they never read and were not given time to read and not given copies, which took away valuable rights and were unlawful in their terms.”

Read full PRESS RELEASE Amended Complaint against Xe Blackwater here.

Contact Scott J. Bloch, PA:

Scott Bloch, 202-496-1290

September 21, 2011 Posted by | Blackwater, Civilian Contractors, Contractor Oversight, Defense Base Act, Follow the Money, Government Contractor, Legal Jurisdictions, Politics, Private Military Contractors, Private Security Contractor, Ronco, Ronco Consulting Corporation, State Department, Taxes, Wartime Contracting | , , , , , , , , | Leave a comment

Contractor Companies Misclassifying Employees for Tax and Defense Base Act Insurance Purposes

Some Contract Companies avoid paying Medicare and Social Security Taxes on their employees by classifying them as independent contractors or consultants.  The IRS considers this to be Fraud.

These same companies claim these same independent contractors/consultants to be employee’s for the purposes of acquiring the mandated Defense Base Act Worker’s Compensation Insurance.  Even going so far as to have workers sign and back date employment contracts after they have been injured so they will be covered.

See more on Misclassification of Employee’s as Contractors at Overseas Contractors Tax Information where you will also find a link to the IRS Form SS-8 that you will need to fill out if you have been misclassified.

Following is a recent SS-8 Determination which confirms the Misclassification and opens up the company to an investigation of Tax and Insurance Fraud and US Labor Law Violations.


February 24, 2011 Posted by | Blackwater, Civilian Contractors, Contractor Oversight, Defense Base Act, Follow the Money, Government Contractor, Private Military Contractors, Private Security Contractor, Taxes | , , , , , , | Leave a comment

G4S Joins the UN Global Compact for Responsible Business

Crawley, West Sussex, United Kingdom, 02/23/2011 – G4S has signed up to the United Nations Global Compact, an international standard which promotes socially responsible business behaviour in the areas of human rights, labour, the environment and anti-corruption.

“The principles set out in the Compact are already pretty well embedded in our existing policies, so we thought the time was right to make a public commitment to this excellent initiative, ” said G4S plc CEO Nick Buckles. “Doing so will give us extra impetus to ensure respect for human rights, the environment and ethical behaviour are part of everything we do worldwide.”

As part of our commitment to the Global Compact, G4S (g4s.com) undertakes to make an annual Communication on Progress in the areas set out in the Compact. This obligation will be covered by our Corporate Social Responsibility Report, which we have published since 2009.

More information on the Compact is available at unglobalcompact.org/.

February 24, 2011 Posted by | ArmorGroup, Civilian Contractors, G4S, Private Security Contractor, Ronco, Wackenhut | , , , | Leave a comment

Pentagon Paid Billions To Contractors Suspended For Fraud

By  Amanda Terkel at Huffington Post

WASHINGTON — The military paid a total of $285 billion to more than 100 contractors between 2007 and ’09, even though those same companies were defrauding taxpayers in the same period, according to a new Defense Department report.

What’s perhaps most shocking is that billions of dollars went to contractors who had been either suspended or debarred for misusing taxpayer funds. The Pentagon also spent $270 billion on 91 contractors involved in civil fraud cases that resulted in judgments of more than $1 million. Another $682 million went to 30 contractors convicted of criminal fraud.

The analysis was mandated by a provision that Sen. Bernie Sanders (I-Vt.) inserted into the defense bill last year. The measure also requested that the Defense Department recommend additional ways to punish the violating contractors, but the Report to Congress on Contractor Fraud concluded, “The department believes that existing remedies with respect to contractor wrongdoing are sufficient.”

“It has been said that insanity as doing the same thing over and over and expecting different results,” replied the Sanders staff in an analysis of the findings. “It is clear that DOD’s current approach is not working, and we need a much more vigorous approach to dealing with contractor fraud.”

Sanders underscored the importance of reining in contractor abuse by pointing to the U.S. fiscal situation, saying that the deficit cannot be reduced without looking at the waste, fraud and abuse in the Pentagon’s budget.

“With the country running a $14 trillion national debt, my goal is to provide as much transparency as possible about what is happening with taxpayer money,” he said. “The sad truth is that virtually all of the major defense contractors in this country for years have been engaged in systemic fraudulent behavior, while receiving hundreds of billions of dollars of taxpayer money.”

On Monday, Sen. Tom Coburn (R-Okla.) pressed the Joint Chiefs of Staff to get the military’s books in order, saying he would “continue to push for a budget freeze of all base budget non-military personnel accounts at the Defense Department until it complies with the law regarding auditable financial statements.”

February 2, 2011 Posted by | Civilian Contractors, Contractor Corruption, Contractor Oversight, Department of Defense, Government Contractor, Private Military Contractors, Private Security Contractor | , , , , , | Leave a comment