Iraq fraud case results in $10M judgment

March 10, 2006 at 10:43 AM

ALEXANDRIA, Va., March 10 (UPI) -- A U.S. court jury said a Virginia company should pay more than $10 million for bilking the federal government in contracts involving Iraq reconstruction.

The verdict, handed down Thursday, found Custer Battles LLC overcharged the Coalition Provisional Authority for work that involved supplying Iraq with new currency, The Washington Post reported.

The suit was brought by former Custer Battles employees Robert Isakson and William Baldwin. Under whistle-blower laws, the plaintiffs will get up to 30 percent of the more than $10 million judgment, with the rest going to the U.S. Treasury.

Alan Grayson, an attorney for Isakson and Baldwin, said the owners of Custer Battles were "war profiteers." The plaintiffs alleged that the company set up offshore companies to overcharge the government; the company executives argued the offshore companies were not set up for that reason.

Retired Brig. Gen. Hugh Trent testified Custer Battle's performance was "probably the worst I've seen in my 30 years in the Army," the Post said.

Grayson told the Post "dozens" of other cases related to alleged fraud in Iraqi reconstruction await hearings, but the federal government hasn't announced whether it will join in the suits.

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