Court Revives False Claims Suit Against Triple Canopy

Last week brought a new development in a nearly four-year-old fraud lawsuit accusing private security firm Triple Canopy of providing security guards in Iraq who lacked basic firearms proficiency.

In March 2011, former Triple Canopy employee Omar Badr filed a False Claims Act (FCA) lawsuit alleging the company billed the government for hundreds of Ugandan guards at Al Asad Airbase who did not meet the U.S. Army’s qualifying marksmanship score. The Justice Department intervened in Badr’s lawsuit in October 2012. The following year, the U. S. District Court for the Eastern District of Virginia dismissed the lawsuit, ruling that submitting invoices for unqualified guards did not rise to the level of a false claim.

But last Thursday, the U.S. Court of Appeals for the 4th Circuit reversed the lower court and reinstated the plaintiffs’ FCA claims. (The government did not appeal the dismissal of its common law claims, and the court upheld the dismissal of Badr’s claims alleging fraud on guard contracts at other bases in Iraq.)

The appellate court ruled that firearms certification was a material requirement under the contract, such that Triple Canopy’s alleged concealment of this information when it sought payment could constitute a false claim. The allegation that the company falsified guards’ firearms proficiency records also factored in the court’s decision.

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

It is unclear whether Triple Canopy will appeal the decision. The company did not respond to our request for comment. The government asserts that the alleged fraud in this case cost taxpayers more than $10 million, which would be tripled under the FCA if the government wins at trial.

Founded in 2003, Triple Canopy has received more than $2.2 billion in federal contracts. In 2011, the Commission on Wartime Contracting in Iraq and Afghanistan reported that the company’s Ugandan security guards at Forward Operating Base Delta in Iraq “were often ill-equipped and without basic cold-weather gear such as gloves.”