“Never once in their complaint or in their brief do the relators ever allege — let alone allege with plausibility and particularity — that the government actually or likely would have refused to pay Academi had it known of the alleged misrepresentations,” Academi said. “The absence of such alleged facts by itself mandates that the relators’ claims be dismissed under Rule 8 and Rule 9(b) for failing to plead materiality as required by Escobar.”

According to Academi, the former marksmen had contended that even if one of their causes of action under the FCA failed under Escobar, their other claims still had standing. But Academi said Escobar dooms them all, noting that a common requirement for FCA claims is that the alleged falsehood must be “material.”

William Copley, a Weisbrod Matteis & Copley PLLC attorney representing the marksmen, told Law360 on Friday that “Academi’s motion is a late-stage Hail Mary that indefensibly misreads the Supreme Court’s recent decision in Escobar as a significant retraction of the scope of the False Claims Act, and misrepresents the allegations in the complaint.”

Copley added, “No other court has adopted Academi’s misreading of Escobar, and we do not expect the district court in this case to be the first.”

Counsel for Academi did not respond Friday to a request for comment.

The same day Academi moved for a win, Beauchamp and Shepherd slammed the company for adding 46 witnesses to its original list of nine shortly before the close of discovery, calling the untimely disclosure an attempt at “trial by ambush.”

In addition to asking the court to block Academi’s newly disclosed witnesses from testifying at trial, the relators hit back at the company for failing to authenticate thousands of its business records, which include invoices and vouchers from the State Department.

The case has had ongoing discovery disputes, including when the court in September said fellow State Department contractor Triple Canopy Inc. will have to comply with a third-party subpoena after a magistrate judge refused to let the security contractor off the hook.

Since winning expanded discovery on the FCA allegations in the summer, the former marksmen have pushed for more documents from third parties, such as Triple Canopy. Triple Canopy and Academi have both pushed back on requests for firearms training scorecards, and Triple Canopy had filed a motion to quash the document requests, claiming that they run too far afield from the actual issues in the case.

The men filed their initial complaint against what had been known as Xe Services LLC in April 2011, accusing their former employer of lying about the work duties of employees for billing purposes, charging the State Department for work performed by contractors who had been disqualified by failed drug tests and billing for unqualified shooters.

U.S. District Judge T.S. Ellis III dismissed their case in March 2013 because their second amended complaint, filed in November 2012, came after a news report the previous July publicly revealed the accusations. The government declined to intervene in the case, and the allegations were also investigated by the State Department’s Office of Inspector General.

The whistleblowers then appealed to revive the weapons qualification allegations in their suit, which contended that they were unqualified to use the M249 and M240 belt-fed machine guns they were required to know how to use and that their weapons certifications had been falsified. Academi’s U.S. Training Center Inc. had routinely falsified the weapons certifications, the men claimed.

The Fourth Circuit revived their suit in February, finding that the former contractors’ claims preceded any public disclosure of the allegations by more than a year.

“Through constantly shifting theories, McBride has dragged this languishing case along long after discovery — including the deposition testimony of the U.S. Army’s own Federal Rule of Civil Procedure 30(b)(6) witnesses — made clear that KBR’s recreation-center headcounts were immaterial,” the brief said.

The companies urged the court to reject McBride’s appeal without oral argument, citing years of litigation and high cost of its defense. In addition, the companies pointed out that only KBR Services is the proper defendant in the case, and the litigation has put a substantial burden on the other companies involved.

“The time has come to finally close the book on this costly litigation, which, as the district court noted, has forced KBR to spend ‘a king’s ransom’ defending against baseless claims,” the brief said.

McBride’s appeal argued that the judge did not apply a two-prong test, laid out in U.S. v. Science Applications International Corp., in which a court weighs whether adherence to contractual requirements was either a precondition for payment or material to payment.

Had U.S. District Judge Frederick J. Scullin Jr. used this test, he would have found that contract clauses made clear that contract adherence was a condition for KBR’s payment, she said. In addition, a government contracting officer has said officials “may not have paid” had they known KBR violated its contractual obligations, McBride said.

KBR did not meet a contractual obligation related to keeping sufficient records of its staffing levels at a morale, welfare and recreation center for Marines in Iraq, and therefore filed false claims by not disclosing this when it billed the government for payment, according to McBride.

An attorney for KBR has said that the contractor did not inflate its staffing numbers and did not use these figures as a basis for its billing. Thursday’s brief built on that argument, saying that contracting officials based their staffing for billing on the overall population of the base, not any measure of the use of the facility.

In a statement from counsel John Elwood, KBR defended its record in Iraq, saying it was proud of the work that it had done on behalf of the military and that it hoped the DC Circuit would affirm Judge Scullin’s decision.

“The district court correctly held that the alleged inflation of headcounts at KBR-run recreation centers in Iraq was immaterial to government payment decisions and thus cannot give rise to False Claims Act liability. Relator Julie McBride’s appeal seeks to set aside that well-reasoned decision,” the statement said.

McBride, along with two former KBR employees, had filed a qui tam suit against KBR, then-parent Halliburton Co. and several units of the companies in April 2005, alleging violations of the FCA, retaliation, and breach of employment contract.

In 2001, KBR had been awarded a contract to carry out the third round of the U.S. Department of Defense’s Logistics Civil Augmentation Program in support of the global war on terror. According to the suit, the defendants overbilled the government on one of the task orders under the multibillion-dollar contract, which allowed KBR to bill the government for a base fee, plus a potential performance fee and costs.

In October 2015, Judge Scullin declined to reconsider his summary judgment grant to KBR, saying he already wrestled with the case law and was unconvinced by McBride’s arguments there was sufficient evidence to support claims against the contractor.

“Plaintiffs either do not understand these facts or do not want to understand them. Plaintiffs selectively pull snippets and sound bites out of context from lengthy records in separate, unrelated proceedings,” KBR said in opposing the June 13 motion to compel. “The purpose of plaintiffs’ motion is not to compel KBR to do something — indeed, as KBR has repeatedly informed the court, KBR is already doing everything within its power to produce these data as fast as possible. The purpose of plaintiffs’ motion is simply to pad the record with frivolous ‘complaints’ about the discovery process in this case.”

The soldiers’ discovery modus operandi, KBR continued, “is to demand the sun, the moon, and all the stars, and then cry foul when they are denied a few constellations.”

The multidistrict litigation alleges that KBR burned waste — including lithium batteries, plastic foam, paints, solvents, asbestos and other hazardous materials — in open-air burn pits on military bases in Iraq and Afghanistan without taking safety precautions. The soldiers and other military personnel who were stationed at the bases also say they were harmed by the company’s inability to properly operate water purification facilities at some military bases.

In pressing for the motion to compel last week, the soldiers argued that KBR has spent years trying to evade the production of relevant emails for discovery even as it relies on “fact-intensive” defenses based on jurisdictional questions — the discovery fight here is based purely on whether the court even has the right to hear the case at all. The Aug. 31 deadline covers a “limited email universe,” the soldiers said at the time.

KBR countered Friday that the plaintiffs are pursuing a “mischievous motion to compel” that is “a parade of falsehoods.” KBR contended that it must deal with data security issues created by government employees accidentally sending the contractor classified emails in a “data spill,” emails that must be protected in discovery via a “new and unprecedented” pre-screening process.

The contractor argued that it has been upfront with the issues complicating its ability to meet the Aug. 31 deadline and said the judge should focus on the schedule at a hearing on the matter scheduled for Thursday.

Nor has KBR tried to evade discovery as the soldiers contend, according to the brief.

“KBR has presented its view that email discovery is unlikely to yield useful or jurisdictionally relevant information that would add materially to the record (and that could, for example, alter the sworn testimony of senior military commanders),” it said. “But there is no factual support for plaintiffs’ repeated claims that KBR somehow devised an elaborate plan to prevent them from getting emails.”

It would be “silly and illogical” for KBR to try and put off discovery, it said, because the company has every incentive to try and resolve this lawsuit and others as quickly as it can. A “massive volume” of electronic discovery has already been handed over, KBR said, noting that more than two million electronic document pages that have been produced so far.

The soldiers hit back with a reply brief Monday accusing KBR of failing to comply with content management order, or CMO, deadlines, in good faith.

“KBR continues to mislead the court by claiming delays attributable to the data spill are ‘entirely outside of KBR’s control,’” they said. “Yet KBR has not — and cannot — introduce evidence rebutting the sworn declarations of [Defense Security Services] officials, which reveals that KBR’s own misconduct led to the lengthy delays.”

KBR has already pulled some of the POI’s data for other litigation, the soldiers said, arguing the warnings of a 3 terabyte data dump are based on “amorphous estimates.” Nor did KBR take prompt action from the data spill and in fact made the matter worse, according to the brief, which also argued that the company failed to meet its security obligations and misled the government on its compliance with those requirements.

A representative for KBR did not immediately respond Monday to a request for comment.

Sheldon J. Morgan, 36, pleaded guilty in Fairbanks, Alaska, before U.S. District Judge Ralph R. Beistline of the District of Alaska to a one-count information charging him with conspiracy to receive bribes and defraud the United States. Sentencing is scheduled for Oct. 21, 2016.

According to admissions made as part of this plea agreement, from May 2010 until May 2011, Morgan, then a specialist in the U.S. Army, was deployed at FOB Fenty, near Jalalabad, Afghanistan. FOB Fenty served as a hub for distribution of fuel to nearby military bases. Morgan’s duties included assisting in overseeing the distribution of fuel to the bases, he admitted.

Morgan also admitted that on two separate occasions in December 2010, he arranged for a translator employed by an Afghan trucking company to steal 5,000 gallons of fuel. The translator promised Morgan $5,000 per truckload and wired the money to an account outside of the United States that Morgan had his wife open in her name, according to the plea agreement. Morgan admitted that he and his wife used the money for their personal benefit. The conspiracy caused approximately $37,300 in loss to the U.S. government.

This is the eighth guilty plea for similar fuel theft/bribery schemes at FOB Fenty for U.S. military members and their associates who were assigned to the base between June 2009 and April 2012.

The FBI and SIGAR investigated the case. Trial Attorney Daniel P. Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen Cooper of the District of Alaska are prosecuting the case.

As reported by DOJ https://www.justice.gov

The contract protest was denied

VIEW GAO DECISION ⇒

Both the United States and the United Nations have imposed a series of restrictions on military dealings in Libya. Prince is also suspected of attempting to open Chinese bank accounts to move money for his Libyan associates. As part of its investigation, The Intercept obtained an internal slide presentation showing Prince’s private force would operate in Libya for the stated purpose of stopping the flow of refugees to Europe.

Prince has also long been interested in raising a private military force to battle Islamic militant groups in a variety of countries. We spend the hour with The Intercept’s Jeremy Scahill and Matthew Cole, the reporters behind "Erik Prince in the Hot Seat." "In a lot of ways, Erik Prince is like a Mafia don," Scahill says. "He has been able to avoid any criminal charges against him personally for activities that his companies have engaged in. … Whether or not the U.S. government will actually seriously go after him is still to be seen." Scahill is the co-founder of The Intercept and author of the best-seller, "Blackwater: The Rise of the World’s Most Powerful Mercenary Army." His most recent book, "Dirty Wars: The World is a Battlefield," is out in paperback, and his film "Dirty Wars" was nominated for an Academy Award.

Original Story: democracynow.org

“Our military depends on the private sector – both prime contractors and subcontractors – to provide critical services to protect the health and safety of our men and women in uniform,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Those subcontractors who knowingly inflate the costs of these services, which are passed onto the government and the taxpayer, will face appropriate consequences.  Today’s settlement demonstrates our continuing vigilance to ensure that our servicemen and women obtain the services they need at the price we bargained for.”

Wackenhut provided U.S. military bases with firefighting and fire protection services under a subcontract with Kellogg Brown & Root Inc. (KBR), the prime contractor for the Army’s contract for logistical support in the military theater, known as LOGCAP III.  LOGCAP III is the third generation of contracts under the Army’s Logistical Civil Augmentation Program.  The government alleged that from 2008 to 2010, Wackenhut inflated its labor costs by billing the salaries of certain managers as direct costs under the subcontract, when those salaries had already been charged as indirect costs.  The government further alleged that Wackenhut artificially inflated its labor rate by counting its costs for holidays, vacation, sick leave, rest and recuperation and other variable labor costs twice in calculating the rate.  Wackenhut billed KBR, which then passed on the costs to the government under LOGCAP III.

“Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the U.S. government,” said Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service (DCIS) Southwest Field Office.  “The DCIS is committed to working with its partner agencies, such as the U.S. Department of Justice, Defense Contract Audit Agency and the U.S. Army Criminal Investigation Command to ensure the integrity of the Defense Department’s procurement process.  This settlement demonstrates that combatting fraud, waste and abuse within Department of Defense contracting remains a top priority.”

This settlement resolves a lawsuit filed by whistleblower Gary W. Reno under the qui tam or whistleblower provisions of the False Claims Act.  The act permits private individuals to sue on behalf of the government those who falsely claim federal funds, or cause others to do so, and to receive a share of any funds recovered through the lawsuit.  Reno will receive $1.332 million as his share of the recovery.

This settlement was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Eastern District of Texas, the Department of Defense Inspector General’s Office, the Defense Criminal Investigative Service and the Defense Contract Audit Agency.

The case is captioned Reno v. Kellogg Brown & Root, Inc. and Wackenhut Services, LLC, et al., Case No. 1:10-CV-504 (E.D. Tex.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

Department of Justice — http://www.justice.gov/

A total of 380 employees who worked on the contract will be laid off, according to the company.

The Air Force loss is DynCorp’s third one in the last six months. DynCorp also lost two contracts worth $71 million with an arm of the Defense Intelligence Agency last summer, affecting more than 60 employees.

The company — which is one of the largest contractors in Afghanistan — had a turbulent year in 2014, with falling sales and leadership shuffles.

The government’s campaign against the Islamic State had contributed to a slight uptick in business, executives said in DynCorp’s last earnings report. In 2015, DynCorp is looking to renew a lucrative State Department security contract worth up to $10 billion.

Details about the loss of the Air Force contract were reported earlier by the Washington Business Journal.

The ruling was undeniably a win for Simmons, who had previously been ordered detained pending further legal proceedings by a federal magistrate judge. Prosecutors had argued that Simmons had a violent past and a long history of ignoring court orders and should not be let go pending trial. Defense attorneys asserted that he was singularly focused on winning his case and would do nothing to jeopardize that if allowed out.

After the judge's ruling, Simmons's daughter, Alison Little, issued a statement saying that the family wanted to "express our full and steadfast support of Wayne."

" 'A Clear and innocent conscience fears nothing' and this rings true for Wayne during this unsubstantiated fleecing of his reputation in the court of public opinion AS WELL AS the justice system," the statement said. "We will battle this with everything we have, understanding that inevitably truth and justice will prevail and Wayne will certainly be vindicated."

The family also thanked their supporters, saying it was "a blessing to have you all by our side at this time."

"For those of us who know Wayne, we know a kind and loving man who would do anything for his family, friends and community," the statement said. "It has been disgusting to watch such a man have his name destroyed based upon allegations, not facts."

Simmons was arrested last month and charged with making false statements, major fraud against the United States and wire fraud. By prosecutors' accounts, Simmons lied on government documents about a career with the CIA to help him win interim security clearances and jobs with two government contractors, including BAE Systems, and was deployed overseas as an adviser to senior U.S. military personnel. He was a frequent, unpaid commentator on Fox News.

In advocating that Simmons remain behind bars, federal prosecutors offered many new details about Simmons's purported past and current misdeeds. Assistant U.S. Attorney Paul J. Nathanson said the fraud of which Simmons stands accused is far from ordinary: By lying about CIA work, Nathanson said, Simmons was deployed to Afghanistan for some weeks as a senior adviser to Gen. Stanley A. McChrystal, putting him "in a war zone with access to classified material."

Nathanson said that in reality, Simmons was little more than a lifelong criminal with no significant work history or money to his name. He said that Simmons, who owns a 5,000-square-foot house valued at $2 million in Annapolis, had not made a mortgage payment since 2010, although he claimed to have done so on his taxes. Simmons, he said, supported himself mostly on the more than $500,000 he persuaded a man in his 80s to give or lend to him.

Nathanson also said Simmons's criminal record includes convictions for 11 DUIs as well as for assault, gambling and having a firearm. In the assault case, which occurred in 1980 in Prince George's County, Md., Simmons was accused of firing a pistol at three people he'd had a verbal altercation with in the parking lot of a disco, Nathanson said. He added that Simmons would sometimes list his convictions on government documents but would claim they were "all related to top-secret, classified CIA stuff."

Nathanson said that even though Simmons was convicted of being a felon in possession of a firearm, he had a contract to sell assault rifles for Adcor Defense, and he said in a 2014 interview with the FBI that he was a business partner of Marc Turi, a gun dealer who reportedly pondered selling weapons in Libya and is now charged with violating arms-export laws and submitting false documents. Adcor and Turi's attorney did not immediately return messages seeking comment, and Nathanson said investigators were still looking into Simmons's claim about a relationship with Turi. Ellis ordered that Simmons have no dealings involving weapons during his release.

Whitney Minter, Simmons's attorney, said that Simmons intended to follow the release conditions "to the letter," and in a written filing pointed to several relatively prominent supporters who wrote letters on his behalf. Among them: retired Prince George's sheriff James V. Aluisi, retired Navy Adm. James A. Lyons Jr., retired Air Force Lt. Gen. Thomas G. McInerney, and TV personality and retired New Jersey Superior Court judge Andrew P. Napolitano.

Aluisi wrote that he knew Simmons only as a local businessman and that he was always a "perfect gentleman." McInerney wrote that he and Simmons had traveled to Iraq and met with the secretary of defense and that his conduct had been "above reproach at all times." Napolitano wrote that Simmons's "savvy analysis of intelligence issues could not have come out of the mouth of a person untutored or unfamiliar with the subjects we have discussed."

"We spent a day together in 2003 as guests of the Department of Defense at Guantanamo Bay, Cuba, examining there the detention facilities. I assume he received the same [Department of Defense] vetting as I did prior to the trip, as we received serious intelligence and military briefings at Gitmo," Napolitano said in the letter. "He has been a guest on my former Fox show and he has been one of the go-to intelligence and military personalities who have mingled comfortably and credibly at Fox."

Three executives in PA recently pleaded guilty to perpetrating a 16-year fraud on the government by claiming to be a disadvantaged business enterprise in order to win $19 million of transportation contracts.

In addition, a Navy contractor was just indicted for falsely certifying that he had paid all subcontractors on a navy warehouse renovation project when he allegedly pocketed the money and left subcontractors and suppliers unpaid.

In fact, according to the Enterprise, this case against KBR came about as a result of another investigation into a different case of fraudulent billings.

It seems, though, that there is an uptick in the crackdown of these cases, as evidenced by the fine the courts have ordered KBR to pay.

Dive Brief:

• Contractor KBR, Inc. must pay the federal government $108,000 for accepting subcontractor gifts while performing under a Logistics Civil Augmentation Program (LOGCAP III) contract for the U.S. Department of Defense, the Beaumont Enterprise reported.
• Managers for the Houston-based contractor, the Enterprise reported, improperly accepted expensive dinners, golf outings and event tickets from two subcontractors that had previously settled claims for kickback violations.
• Under the LOGCAP III contract, KBR constructed facilities and managed the infrastructure for Army base camps, as well of a host of other services, in Iraq and Afghanistan.

By: Kim Slowey of Construction Dive http://www.constructiondive.com/

The report evaluates statistical data, comments concerning the acrid smell of burn-pit emissions, as well as satellite images, that demonstrate pollution from open-air trash burning on US bases. Bond reports that at the Balad Air Base in Iraq (2003 to late 2009), it incinerated up to 300 tons of waste per day at its peak. The open-air burn pit “continuously produced a column of smoke” so high it was even incorporated by programs for simulated flight navigation at the air base.

The report states that, “Thousands of US soldiers and other coalition troops were exposed to burn-pit emissions, which have been linked with toxins known to cause negative health outcomes. These chemicals include dioxins, ‘acetaldehyde, acrolein, arsenic, benzene … ethylbenzene, formaldehyde, hydrogen cyanide, hydrogen chloride, hydrogen fluoride, various metals, nitrogen dioxide, phosgene, sulfuric acid, sulfur dioxide, toluene, trichloroethane, trichloropropane, and xylene’ (Curtis 2006). And just as important as the actual chemical constituents, burning trash at US bases without controls produced pollution in the form of very small particulate matter, which can get lodged in human lungs and is associated with a number of chronic illnesses (IoM 2011).”

The author concludes that the same strategy of “denial” only works so long and then the truth is revealed. He reflects that the denial strategy was utilized early on concerning “Agent Orange.,” decades ago. It was a toxic herbicide utilized by US in the Vietnam War. Subsequently, exposure to Agent Orange was recognized as a substance that was causally related to serious medical conditions.

A consolidated lawsuit is now proceeding ahead in the US District Court against KBR, a government contractor. The lawsuit alleges that KBR, exposed American service members and private civilian contract workers to dangerous and toxic fumes from its unauthorized use of open-air surface burn pits. The exposed individuals and their families brought a lawsuit against KBR for its allegedly improper use of the burn pits and for failing to warn veterans and civilians of the hazards of being exposed.

The cases allege that prolonged exposure to the burn pits' smoke, ash and fumes that may have resulted in chronic diseases, risk of future illness and death. The lawsuit alleges that KBR burned large amounts of unsorted waste, including hazardous waste, medical waste, and human waste, at military facilities in Iraq and Afghanistan.

The cases In re KBR Inc, Burn Pit Litigation, have been consolidated, and are venued in U.S. District Court for the District of Maryland, Greenbelt Division, before Judge Roger W. Titus.

Click here to read more about burn pit claims for benefits and lawsuits.

The contract protest was denied by on August 4, 2015 VIEW 20 PAGE REPORT ⇒

In connection with his guilty plea, Lee admitted that, as the president and chief executive officer of American Logistics Services (ALS), a Kuwaiti company providing supplies to the U.S. military in Iraq, he paid a $15,000 bribe to former Lieutenant Markus E. McClain in exchange for favorable official action in the awarding of an extension of a lucrative bus contract to ALS. Specifically, Lee admitted that, in August 2004, several of his employees met with former Lieutenant McClain at Camp Arifjan, Kuwait, and offered McClain $15,000 and a Rolex watch in exchange for former Lieutenant McClain’s assistance in getting the contract extension to ALS. Former Lieutenant McClain ultimately accepted the bribe payment.

During the sentencing hearing, the court also made specific findings that Lee directed the payment of over $1 million in bribes to other Army personnel.

Former Lieutenant McClain previously pleaded guilty to one count of accepting a gratuity, and will be sentenced on Oct. 23, 2015. In addition, Lee’s son, Justin Lee, previously pleaded guilty to one count of conspiracy to commit bribery and four counts of bribery for his role in the scheme, and is scheduled to be sentenced on Oct. 29, 2015.

The case is being investigated by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the U.S. Department of Homeland Security Immigration and Customs Enforcement, and previously was investigated by the Office of the Special Inspector General for Iraq Reconstruction. The case is being prosecuted by Trial Attorneys John Keller and Richard Evans of the Criminal Division’s Public Integrity Section and the U.S. Attorney’s Office of the Eastern District of Pennsylvania.

SOURCE: Department of Justice