Iraq contract abuse alleged

Feb. 13, 2006 at 9:44 AM

ALEXANDRIA, Va., Feb. 13 (UPI) -- Two former employees have accused a U.S. company of overcharging the government on Iraq reconstruction contracts and have a court date to press the allegations.

The civil trial of Scott Custer and Michael Battles is set to begin Tuesday in Alexandria, Va., and is expected to last two weeks. If the court finds allegations by Robert Isakson and William Baldwin to be true the company founded by former Army officers Custer and Battles could be fined $3 million.

The trial is the first such case related to Iraq reconstruction, The Washington Post reported. Custer and Battles deny the accusations and say Isakson and Baldwin are disgruntled competitors, the newspaper said.

Attorneys for Isakson and Baldwin gave the Post a spreadsheet they say shows the Custer Battles company used shell companies to overbill the government, including $74,000 generators billed at $400,000.

The company won contracts in Iraq regarding security at the Baghdad airport and also the distribution of a new money supply in Iraq, the Post said.

The claim was filed under the False Claims Act, a law enacted in the 1860s. While individuals file the claims on behalf of the government, they can receive up to 15 percent of any damages collected.

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