Iraq Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against APTx Vehicle Systems Limited, Alchemie Grp Ltd, and Haslen Back, the director and shareholder of Alchemie.  They are accused of wire fraud conspiracy.

In relation to the criminal charges, British contractor APTx Vehicle Systems Limited agreed to plead guilty to conspiracy to defraud the United States, the Coalition Provisional Authority that governed Iraq from April 2003 to June 2004, the government of Iraq and JP Morgan Chase Bank. In relation to the civil charges, APTx, Alchemie and Haslen Back, agreed to pay $2 million to the United States to resolve False Claims Act violations. The whistleblower will receive $540,000 as its share of the settlement amount.

According to the criminal information, APTx engaged in a fraudulent scheme involving an August 2004 contract valued at over $8.4 million for the procurement of 51 vehicles for the Iraqi Police Authority.  The contract was initially awarded to a different, “prime” contractor, which in turn subcontracted the procurement to APTx for over $5.7 million.  Payment under the contract was by letters of credit issued by JP Morgan Bank.

The criminal information further charges that in May and June 2005, APTx submitted shipping documents to JP Morgan to draw down on the letters of credit, which falsely and fraudulently asserted that all 51 vehicles were produced and ready to ship to Iraq.   In fact, as APTx knew, none of the vehicles had been built, none of the vehicles were legally owned or held by APTx and none of the vehicles were in the process of transport to Iraq.  The fraudulent shipping documents also listed a company as the freight carrier that APTx knew was not a shipping company and named a fictitious company as the freight forwarder. 

A settlement has been reached in a whistleblower class action lawsuit brought against DynCorp International LLC and The Sandi Group (TSG). They are accused of submitting false claims to the Department of State.

According to the settlement, DynCorp has agreed to pay the United States $7.7 million and TSG agreed to pay $1.01 million. The whistleblowers will will share a total of up to $481,710 of the government’s recovery.

Originally filed in September 2006, the United States alleged that DynCorp submitted inflated claims for the construction of container camps at various locations in Iraq and that TSG sought reimbursement for danger pay that it falsely claimed to have paid its U.S. expatriate employees working in Iraq.

A settlement has been reached in a whistleblower class action lawsuit brought against Maersk Line Limited who is accused of submitting false claims to the United States in connection with contracts to transport cargo in shipping containers to support U.S. troops in Afghanistan and Iraq.

The whistleblower in this action will receive $3.6 million of the government's recovery. 

The initial whistleblower case was filed in December 2011.  The government's complaint alleged 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 U.S. 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 U.S. 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.

A settlement has been reached in a whistleblower case with ATK Launch Systems Inc who is accused of selling dangerous and defective illumination flares to the Army and the Air Force. 

ATK has agreed to pay the United States $21 million in cash and provide necessary in-kind services worth $15,967,160 to fix the 76,000 unsafe para-flares remaining in the government’s inventory.  The whistleblower's settlement amount has not been disclosed.

The government alled that ATK, from 2000 to 2006, delivered LUU-2 and LUU-19 illuminating para-flares to the Defense Department. These flares, which burn in excess of 3,000 degrees Fahrenheit for over five minutes, are used for nighttime combat, covert and search and rescue operations and have been used extensively by American forces in Iraq and Afghanistan in the global war on terror. The government alleged that the flares delivered by ATK were incapable of withstanding a 10-foot drop test without exploding or igniting, as required by specifications, and that ATK was aware of this when it submitted claims for payment.

A settlement has been reached in a whistleblower class action lawsuit brought against an Alcatel-Lucent subsidiary, Lucent Technologies World Services Inc (LTWSI), who is accused of submitting misleading testing certifications to the Army in connection with the design, construction and modernization of Iraq’s emergency communications system.

The whistleblower will receive a $758,000 share of the settlement.

The initial whistleblower case was filed December 2008.  In March 2004, the U.S. Army awarded LTWSI a $250 million contract to build the Advanced First Responder Network (AFRN), a 911 emergency response and first responder communications system designed to enable Iraqis to summon police, fire and medical assistance in emergencies. The United States alleged that LTWSI submitted claims for payment for equipment, services and contract performance award fees under the AFRN contract based upon inaccurate certifications that LTWSI, between January and July 2005, had performed and successfully completed certain testing of AFRN radio transmission sites, as well as validation of the network as a whole, to ensure the network’s proper operation prior to acceptance by the United States and transfer to the Iraqi government.

A settlement has been reached in a whistleblower class action lawsuit brought against M.K. Battery, Inc., East Penn Manufacturing Co., Inc. and other corporations involved in the manufacture of gun turrets installed on combat vehicles in Iraq who are accused of substituting batteries for use in Humvee gun turrets that had lesser capacities than the batteries the Army believed it was buying.

The defendants in this False Claims Act case have agreed to pay $5.5 million dollars to the United States.

The settlement resolves claims made in a complainty filed in 2008 filed on behalf of a whistleblower that worked at one of the turret manufacturers.