WP: Contractor Bilked U.S. on Iraq Work, Federal Jury Rules

[Coexist]

What a HUGE victory for the taxpayers!!!


http://www.washingtonpost.com/wp-dyn/content/article/2006/03/09/AR2006030902150.html

Custer Battles Is Told It Should Pay More Than $10 Million in Damages

By Charles R. Babcock
Washington Post Staff Writer
Friday, March 10, 2006; Page A14
<snip>
Two Army veterans and their company cheated the U.S. government on a contract to furnish Iraq with a new currency in 2003 and should pay more than $10 million in assorted damages, a federal jury in Alexandria ruled yesterday.

In the first civil fraud verdict arising from the war effort, the eight-member panel decided, after two days of deliberation, in favor of two former workers who claimed in a lawsuit that Custer Battles LLC created phony Cayman Island companies to overcharge the Coalition Provisional Authority that ran Iraq after the U.S.-led invasion in 2003.

<snip>
Grayson said yesterday that there are "dozens" of other fraud cases about contracts in Iraq that remain sealed because the department has not decided whether to join them or not. He called such delay "a dereliction of duty." His clients will get 25 to 30 percent of the awarded damages, with the rest going to the U.S. Treasury, he said.

<snip>
He testified that of the 36 trucks the firm supplied, 34 did not work. When he confronted Battles, he said Battles responded: "You asked for trucks and we complied with our contract and it is immaterial whether the trucks were operational."




:toast:

[harlinchi]

1. Penny wisdom and pound foolishness.

Considering Halliburton's various fraud concerns run into the billions, seeking little guys seems silly.

[Coexist]

2. but I like seeing a precedent set.

baby steps, right?! I think this article is huge, personally.

[harlinchi]

4. Of course. Any steps to begin sound good.

I hope they do get to the bigger fish, though.

[Coexist]

3. NYT: U.S. Contractor Found Guilty of $3 Million Fraud in Iraq

http://www.nytimes.com/2006/03/10/international/middleeast/10contract.html?hp&ex=1141966800&en=c3064978d1aef67d&ei=5094&partner=homepage
<snip>
After a three-week trial, the jury found that the entire $3 million was gained by fraud. According to the law, the company, which is based in McLean, Va., and its two owners and a former executive must now repay the government triple damages and also pay fines for 37 fraudulent acts.

Of more than $10 million in damages and penalties, most will go to the federal treasury while the whistle-blowers will receive from 25 percent to 30 percent.

<snip>
"It fell upon whistle-blowers not only to bring this case to light but to recover money for taxpayers," Mr. Grayson said in a telephone interview.

The widely reported allegations against Custer Battles have come to symbolize the poorly monitored reconstruction spending in Iraq. In early 2003, Mr. Custer and Mr. Battles, two former Army Rangers in their 30's with limited experience, showed up in Baghdad and soon won a series of security and logistics contracts worth more than $100 million.


...interesting.