ATLANTA (CN) — Attorneys for a Czech Republic-based weapons supplier asked an 11th Circuit panel Tuesday to reverse a federal judge’s dismissal of its fraud and racketeering complaint alleging that a major military contractor cheated it out of a nearly $3 million payday.
Weapons supplier Omnipol sued Tampa-based military contractor Purple Shovel, its executives, and three civilian contracting officers employed by U.S. Special Operations Command in 2019, alleging they stole millions owed to Omnipol for a delivery of 7,500 AK-47 assault rifles and split the money amongst themselves.
In its 33-page complaint, Omnipol also claimed that Purple Shovel “targeted and fleeced” SOCom by providing defective weapons and paid kickbacks to SOCom officers to get them through inspections. After Purple Shovel’s license to engage in international arms transactions was revoked, it allegedly looped unsuspecting subcontractors into its scheme to deliver weapons.
A Florida federal judge dismissed Omnipol’s amended complaint in 2019, ruling that the supplier failed to show that the federal employees were acting outside the scope of their employment and that its claims were not barred by sovereign immunity.
Arguing on behalf of Omnipol, attorney Dallas LaPierre of NDH told a three-judge panel of the Atlanta-based appeals court Tuesday that Purple Shovel purposefully “induced” his client into the contract “fully intending that they would receive the arms and armaments to induce SOCom to issue the funds… knowing that they were going to convert those funds to their own use.”
Attorneys for the defendants strongly rebuked the idea that the dismissal should be overturned.
Brian Calciano, a Florida attorney for defendant Christopher Worrell, a former Purple Shovel executive officer, contested his client’s alleged involvement in the scheme and said the complaint was nothing more than an attempt at retribution.
“Essentially, they got burned by Purple Shovel and they’re attempting to hold all these other individuals liable and extract settlements out of them,” he said.
“When you really look at what this amended complaint is alleging, it’s completely off the reservation,” Calciano added, calling the scheme alleged by Omnipol “completely implausible and fanciful.”
Department of Justice attorney Benjamin Schultz, who represents SOCom civilian contracting officers Bryan Siedel, Amy Strother, and Kirk Bristol, told the panel Tuesday that the complaint failed to establish that his clients ever acted outside the scope of their employment.
U.S. Circuit Judge Adalberto Jordan, a Barack Obama appointee, pushed back on Schultz’s argument, asking, “If an allegation is that a federal employee diverted funds, stole funds that were destined to another party, how can that be within the scope of federal employment?”
“The allegations are that there was a broader scheme that included the theft and that that scheme also included the federal employees doing things within the scope of their employment like approving the contract with Purple Shovel,” Schultz explained. “Since that contract was at least partially motivated by the employees’ intent to serve their employer – as the complaint alleges these were quality arms and so they served the government’s defense interest – looking at the broader scheme there was that scope of employment.”
Under Florida law, an employee is considered to be acting within the scope of their employment as long as an action is undertaken at least partially to serve the employer.
“Issuing and approving contracts like the one issued to Purple Shovel is precisely the sort of act the federal defendants were employed to perform, and the acts occurred within the time and space limits of employment,” U.S. District Judge Virginia Hernandez Covington wrote in her ruling dismissing the complaint.
“Here, the federal defendants’ alleged issuance of contracts on behalf of SOCOM generally and the issuance of the June 7, 2016, contract to Purple Shovel specifically were undertaken, at least in part, to serve and benefit their employer, SOCOM,” Covington found.
Jordan was joined on the panel by U.S. Circuit Judge Kevin Newsom, a Donald Trump appointee, and Senior U.S. Circuit Judge Gerald Tjoflat, a Gerald Ford appointee.
It is unclear when the panel will rule on the case.
CORRECTION: An earlier version of this article incorrectly referred to Christopher Worrell as CEO of Purple Shovel. Courthouse News regrets the error.
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