Sunday, August 20, 2006

$10 million verdict overturned in fraud case

Judge rules contractor cheated Iraq’s provisional government, not the U.S.

Updated: 3:36 p.m. ET Aug. 19, 2006

ALEXANDRIA, Va. - A federal judge has overturned on a technicality a $10 million jury verdict against a military contractor accused of defrauding the U.S. government in the first months of the Iraq war.

The award, levied in March against Fairfax-based Custer Battles LLC, had been the first civil fraud verdict arising from the Iraq war.

A former Custer Battles employee had sued under a whistle-blower statute, alleging that the company used shell companies and false invoices to vastly overstate its expenses on a $3 million contract to assist in establishing a currency to replace the Iraqi dinar used during Saddam Hussein's regime.

The verdict reached $10 million because the law calls for triple damages, plus penalties, fines and legal costs.

But U.S. District Judge T.S. Ellis III, in a ruling made public Friday, ruled that Custer Battles' accusers failed to prove that the U.S. government was ever defrauded. Any fraud that occurred was perpetrated instead against the Coalition Provisional Authority, formed to run Iraq until a government was established.

Ellis ruled that the trial evidence failed to show that the U.S. government was the victim, even though U.S. taxpayers ultimately footed the bill. (emphasis mine)

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"...even though U.S. taxpayers ultimately footed the bill."

Geez... Sinister government contractors now have nothing to fear. Just friggin' great!

I suppose if one is sinister and is 'in bed with' our sinister government, then it's only par for the course.