A United States District Court in Virginia issued a ruling on July 2, 2010, in a False Claims Act suit against Blackwater Security Consulting’s alleged owner and corporate defendants. United States ex rels. Davis v. Prince, 2010 WL 2679761 (E.D.Va.)
The “Relators” (those who file a False Claims Act complaint) were former Blackwater employees who brought a two-count complaint alleging that Blackwater defendants are liable under the False Claims Act, 31 U.S.C. Section 3729, for fraudulent misrepresentations they allegedly made in the course of performing two government contracts.
The first contract was a Homeland Security contract to provide security services in Louisiana after Hurricane Katrina. Relators allege that Blackwater defendants “forged and falsified to inflate hours worked and the number of employees”, and further allege that they “claimed costs for payments to strippers, bar tabs, spa trips, protein shakes, weight-training supplements, haircuts, and gym memberships”, and double-charged for certain costs.
The second contract was a State Department contract to provide security services in Iraq and Afghanistan. Relators allegations include that Blackwater defendants knowingly submitted reports documenting more employees than were actually employed and more expenses than were actually incurred.
False Claims Act claims must be specific, describing the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained as a result.
“The elements of a False Claims Act false statements claim are: (i) false representation or fraudulent course of conduct, (ii) made or carried out with knowledge of the falsehood, (iii) that was material, and (iv) that caused the goverment to pay out money”. Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 788 (4th Cir.1999).
Allegations that Blackwater allowed disqualified persons to carry firearms in Louisiana and improperly used deadly force in Iraq and Afghanistan are not appropriately Flase Claims Act matters. These allegations amount to claims that Blackwater breached the terms of their contracts. No “objective falsehood” is demonstrated in the allegations.
In its July 2nd ruling, the Court dismissed the claim against the individual defendant Prince and Prince Group LLC, stating that the claim did not state with particularity a valid fraud claim against these defendants.
For more information about False Claims Act, contact government contracts lawyer Karen S. Hindson.