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Jury fines defense contractor in Iraq $10M
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| Parent(s) |
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| Contributor | RP |
| Last Edited | RP Mar 15, 2006 06:36pm |
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| Category | Legal Ruling |
| Media | Newspaper - USA Today |
| News Date | Friday, March 10, 2006 06:00:00 AM UTC0:0 |
| Description | A federal jury on Thursday ordered a U.S. defense contractor accused of war profiteering in Iraq to pay more than $10 million in damages and fines.
In the first civil fraud case brought against a military contractor during the Iraq war, the jury in Alexandria, Va., found that Custer Battles LLC committed fraud in 37 instances in connection with a $9 million contract to help distribute new currency in Iraq.
The jury's decision came at the end of a three-week trial in which a string of witnesses testified that Custer Battles, which has offices in Rhode Island and Virginia, inflated its expenses with fake invoices that were run through a series of shell subsidiaries set up in the Cayman Islands.
Witnesses also detailed how the company boosted profits by overbilling the government for shoddy equipment.
The company denied the charges and said it would appeal.
The case was brought by two former Custer Battles employees, Robert Isakson and William "Pete" Baldwin, under a Civil War-era law that allows individuals to file lawsuits in secret on behalf of the government. Under the law, the cases are sealed while the government determines whether to join in.
The Justice Department declined to participate. Charles Miller, a department spokesman, declined to comment.
"The Bush administration has done nothing to recover this money or to penalize the people who committed the fraud," said Alan Grayson, attorney for Isakson and Baldwin. "All of the work was done by the whistle-blowers. They did nothing to help us." |
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