Iraq Security Contractor Can’t Duck Fraud Suit

RICHMOND, Va. (CN) - A security contractor accused of sending poor marksmen as guards for a U.S. airbase in Iraq must face fraud claims, the 4th Circuit ruled.

Triple Canopy Inc. received the security contract for Al Asad, the second largest airbase in Iraq, in June 2009, according to the underlying federal complaint.

TO-11, the task order that governed the Al Asad contract, required Triple Canopy to "ensure that all employees have received initial training on the weapon that they carry, [and] that they have qualified on a US Army qualification course."

The United States claims that a score of 23 out of 40 points on the course amounts to qualification, and that the guards' scorecards were to be maintained in personnel files for one year.

Triple Canopy allegedly hired approximately 332 Ugandan guards to serve at Al Asad, supervised by 18 U.S. citizens.

Uncle Sam says personnel files indicated that the guards passed their marksmanship qualifications in Uganda, but it became clear once the guards arrived at Al Asad that they could neither zero their rifles nor score a 23 on the marksmanship course.

Despite knowledge of the guards' inadequacies, Triple Canopy submitted invoices to the government for the guards' pay, according to the government's complaint under the False Claims Act.

It says the firm then tried to train the guards, and that a Triple Canopy supervisor had false scorecards drawn up and put in the guards' personnel files when they still couldn't pass the marksmanship course.

Over time, replacement guards also failed to satisfy the marksmanship requirements, and were also given false scorecards, the government says.

Uncle Sam says 40 guards attempted to qualify but could not in May 2010.

Omar Badr, a Triple Canopy medic who says Triple Canopy ordered him to prepare false scorecards for the guards with scores of 30-31 for male guards and 24-26 for female guards, blew the whistle on the alleged practices.

He said Triple Canopy submitted 12 monthly invoices to the government,, totaling more than $4.4 million, over the yearlong contract.

When TO-11 was not renewed for Triple Canopy, the Ugandan guards were dispatched to four other contract sites around Iraq: Cobra, Kalsue, Delta, and Basra, according to the complaint.

The government intervened in Badr's case as to the allegation that Triple Canopy knowingly presented a false claim for Al Asad, and it added a count for the alleged creation of a false record material to a false claim.

Though a federal judge in Alexandria dismissed all of the False Claims Act Claims, plus Badr's entire complaint, the 4th Circuit said on Jan. 8 that the government may have a case.

Nothing in TO-11 expressly conditioned payment on compliance with the list of responsibilities, but the federal appeals court found that the complaint sufficiently alleges that Canopy undertook a fraudulent scheme to obscure its failure.

"Common sense strongly suggests that the government's decision to pay a contractor for providing base security in an active combat zone would be influenced by knowledge that the guards could not, for lack of a better term, shoot straight," Judge Dennis Shedd wrote for the panel.

"Distilled to its essence," the judges added, "the government's claim is that Triple Canopy, a security contractor with primary responsibility for ensuring the safety of servicemen and women stationed at an airbase in a combat zone, knowingly employed guards who were unable to use their weapons properly and presented claims to the government for payment for those unqualified guards."

By allegedly creating false scorecards, Triple Canopy helps the government's case as to materiality, the court added.

"If Triple Canopy believed that the marksmanship requirement was immaterial to the government's decision to pay, it was unlikely to orchestrate a scheme to falsify records on multiple occasions," the opinion states.

Badr's claims cannot survive, however, the court found, as he did not provide any details as to the alleged false claims.

"The FCA is 'strong medicine in situations where strong remedies are needed,'" the opinion states. "That strong remedy is needed when, as here, a contractor allegedly engages in a year-long fraudulent scheme that includes falsifying records in 25 personnel files for guards serving as a primary security force on a United States airbase in Iraq."

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