Det danske Fredsakademi
Kronologi over fredssagen og international politik 10. Mars 2006 / Time Line March 10, 2006
Version 3.503/10/2006
U.S. Contractor Found Guilty of $3 Million Fraud in Iraq
By ERIK ECKHOLM
In the first corporate whistle-blower case to emerge from Iraq, a
federal jury in Virginia yesterday found a contractor, Custer
Battles L.L.C., guilty of defrauding the United States by filing
grossly inflated invoices for work in the chaotic year after the
Iraqi invasion.
The civil case is expected to be the first of dozens under the
Federal False Claims Act, which allows company insiders to bring
suit on behalf of the government and share in damages awarded.
Two former associates accused Custer Battles of faking invoices
from shell companies to overcharge the coalition authority, then
governing Iraq, by tens of millions of dollars. But the current
trial concerned billing of just $3 million under one of several
contracts the company garnered in the post-invasion scramble.
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.
"This reward won't make or break my life, but I'm pretty pleased,"
said one of the former associates, Robert J. Isakson, a
construction subcontractor who brought the suit with William D.
Baldwin, a former manager in Iraq for Custer Battles.
"I went to the trouble because these guys are crooks," he said.
"They defrauded the U.S. government and did it blatantly."
Mr. Baldwin was also awarded $230,000 in damages because he was
forced out of his job when he complained of illegal activity.
In one of many examples described at the trial, the company filed a
fake invoice saying it had spent $176,000 to build a helipad when
it had actually spent $96,000...
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