Judge OK’s False Claims Act against Contractor Providing Security in Iraq

Two ex-Army Rangers formed a security firm — Custer Battles — and contracted with the U.S. government to supply security for the Baghdad airport. Two former employees of Custer Battles are now blowing the whistle, filing suit utilizing the False Claims Act and hoping to claim a share of the lawsuit proceeds which is nominally brought in the name of the U.S. government. An interesting legal issue was presented when Custer Battles argued in court papers that the False Claims Act only protects the government of the United States from fraud — not the Coalition Povisional Government. U.S. District Judge T.S. Ellis III rejected that argument last week by holding that money paid for Custer Battles’ services was, in part, seized by the Coalition from the old Iraq regime. Such funds are — under principles of international law — the property of the United States. (Richmond Times Dispatch “Whistleblowers can press lawsuit, Two allege (sic) security firm committed fraud on Iraqi contracts,” Jul. 11.)

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