Wow, this is quite the legal news day! James Gordon has been fighting this one for a long time, and it is good to see him become victorious in his case. ($1.35 million for a settlement is not bad) This is also an interesting precedence for False Claims Acts, because now guys can look at this case as an example of how to go about pursuing similar cases. Debra Katz was Gordon’s legal counsel and she would be a good one to put on retainer if you have a False Claims Act that you would like to pursue. –Matt
Edit: 07/11/2011- I have just been contacted by a representative of AGNA in regards to their side of the case. Out of fairness, I think it is important to post their view and you can read their statement in the comments section below.
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, July 7, 2011
Armor Group North America and Its Affiliates Pay $7.5 Million to Resolve False Claims Act Allegations
Armor Group North America Inc. (AGNA) and its affiliates have paid the United States $7.5 million to resolve allegations that AGNA submitted false claims for payment on a State Department contract to provide armed guard services at the U.S. Embassy in Kabul, Afghanistan, the Justice Department announced today. The settlement resolves U.S. claims that in 2007 and 2008, AGNA guards violated the Trafficking Victims Protection Act (TVPA) by visiting brothels in Kabul, and that AGNA’s management knew about the guards’ activities. The settlement also resolves allegations that AGNA misrepresented the prior work experience of 38 third country national guards it had hired to guard the Embassy, and that AGNA failed to comply with certain Foreign Ownership, Control and Influence mitigation requirements on the embassy contract, and on a separate contract to provide guard services at a Naval Support Facility in Bahrain.
The settlement resolves a whistleblower suit filed in the U.S. District Court for the District of Columbia. The lawsuit was initially filed under seal by James Gordon against AGNA, ArmorGroup International plc, G4S plc and Wackenhut Services Inc. under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals, called “relators”, to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. Mr. Gordon will receive $1.35 million of the settlement proceeds. During 2007 and early 2008, Mr. Gordon was employed by AGNA, as its director of operations.
The case remained under seal to permit the United States to investigate the allegations and determine whether it would join the lawsuit. Under the False Claims Act, the United States may recover three times the amount of its losses, plus civil penalties. On April 29, 2011, the
United States joined the suit.
“These contracts are put in place to provide essential support to personnel who are serving in our missions overseas,” said Tony West, Assistant Attorney General for the Civil Division. “The Department of Justice will actively pursue its legal remedies where contractors falsely claim taxpayer dollars for services that fall short of material requirements in their government contracts.”
“Americans deserve to know that their tax dollars are being spent wisely and consistent with our values,” said U.S. Attorney Ronald C. Machen Jr. “Our office has targeted government contractors who fail to meet their obligations to the American people. With this settlement, the U.S. Attorney’s Office for the District of Columbia has now recovered more than $140 million in False Claims Act cases so far this year.”
“The Department of State appreciates the work done by the Department of Justice and the Office of the Inspector General in bringing this case to resolution. The Department of State takes any allegation of contractor misconduct seriously and works as part of the inter-agency community to ensure it is adjudicated properly,” said Ambassador Eric J. Boswell, Assistant Secretary of State for Diplomatic Security.
The Deputy Inspector General for the Department of State, Harold Geisel, said, “We’re pleased with the successful resolution of this case, and I commend the dedication of our OIG investigators. Our efforts should reinforce to American taxpayers that oversight of their tax dollars is taken seriously.”
Assistant Attorney General West and U.S. Attorney Machen thanked the joint investigation team, which includes Special Agents with the Department of State Office of Inspector General, and representatives from the Department of State and the Department of the Navy, for their efforts in the investigation of this matter.
Story here.
July 7, 2011
Contact:
Susan Pitcher
Executive Assistant
Wackenhut Services, Inc.
(561) 472-3619
spitcher@wsihq.com
Armor Group North America Reaches Settlement with Dept. of Justice
Resolving Former Employee’s Allegations
Today’s settlement with the Justice Department involves conduct by personnel of
ArmorGroup North America (“AGNA”) prior to acquisition of ArmorGroup by G4S
plc – and marks an end to the Government’s inquiries regarding AGNA’s
performance of the US Embassy Kabul (“USEK”) contract.
We sharply dispute all the Justice Department’s assertions that there was a
violation of the False Claims Act. When G4S acquired ArmorGroup, it was aware
that AGNA had difficulty in successfully performing the USEK contract. Following
the acquisition, WSI (a G4S subsidiary) took the necessary steps to improve
AGNA’s performance on the USEK contract and to rectify any outstanding
issues. At all times, the Embassy was secure. The company conducted an
extensive investigation of AGNA’s pre-acquisition conduct – and worked closely
with Justice Department lawyers, providing them thousands of pages of
documents and the opportunity to interview ArmorGroup personnel. We know
that the evidence does not support the Government’s allegations of a False
Claims Act violation.
We are adamantly opposed to any form of human trafficking, including use of
prostitutes. The Government alleges that, in 2007, AGNA was four months late
in implementing the specific anti-human trafficking policy required under federal
regulations and claims that some unidentified AGNA personnel frequented
prostitutes during this 4-month period. At all times AGNA prohibited any form of
human trafficking, and did not tolerate violations. Importantly, the specific policy
required by Federal regulations was implemented by AGNA prior to the
ArmorGroup’s acquisition by G4S. The sole individual confirmed to have
frequented prostitutes was fired by AGNA in normal course when his conduct
became known. Further, the Government’s allegations regarding the hiring of
third country national guards and AGNA’s compliance to FOCI requirements are
not supported by the facts – nothing in AGNA’s conduct violated the False
Claims Act.
This case involves allegations made by a former employee. The company’s
investigation and the investigation of the Government both confirmed that these
allegations arose largely from a personal animosity of that former employee
toward AGNA’s supervisor of the work at the Embassy – another former
employee who is named specifically in the Complaint, Mr. Nick Du Plessis.
Based on the company’s review conducted as part of this case, Mr. Du Plessis
was, in fact, an effective leader who played a key role in keeping the Embassy
secure, and has been disparaged unfairly by the allegations. The former
employee’s allegations are set forth in a Complaint filed with the Court in 2009
and also in the Settlement Agreement released by the Government today. The
company’s investigation confirmed that the former employee’s allegations lacked
merit.
The Government declined to intervene generally in the former employee’s
allegations. Disappointingly, the Government decided that it would intervene in
the case with regard to three specific issues which are narrowly described in the
Settlement Agreement. The settlement resolves with finality the three
Government issues – and includes a release by the former employee of all of his
allegations.
The terms of the Settlement Agreement make clear that it is entered by the
parties to avoid costly and disruptive litigation – and that there has been no
finding or admission of liability.
Comment by Feral Jundi — Monday, July 11, 2011 @ 4:27 PM