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Government Sues Triple Canopy for Iraq Contract Fraud

Update: Court Revives False Claims Suit Against Triple Canopy

The Department of Justice announced the filing of a lawsuit against private security firm Triple Canopy for allegedly defrauding the government on an Iraq security contract.

In June 2009, the Joint Contracting Command in Iraq/Afghanistan (JCC-I/A) awarded Triple Canopy a one-year, $9.5 million contract to provide security at Al Asad Airbase, the second largest U.S. airbase in Iraq. According to the government’s complaint, Triple Canopy billed the government for hundreds of Ugandan security guards who did not meet firearms proficiency requirements.

“[Triple Canopy] went further than simply billing the Government for unqualified personnel,” the complaint alleges. “It falsified the documents in its files to show that the unqualified guards each qualified as a ‘Marksman’ on a U.S. Army qualification course.” According to the complaint, the government paid Triple Canopy a total of $10.4 million on the contract between September 2009 and July 2010 in reliance on falsified billing documents.

The government’s False Claims Act lawsuit, which also seeks damages on several common law claims, is based on a whistleblower complaint filed in March 2011 by former Triple Canopy employee Omar Badr, who claims he witnessed the alleged fraud at Al Asad and reported it to several company officials in May 2010. Ironically, one month later, Triple Canopy CEO Ignacio “Iggy” Balderas testified before the Commission on Wartime Contracting in Iraq and Afghanistan (CWC), where he boasted about his company’s “legal, moral and ethical manner” and about providing its personnel “the right training and equipment.” He even specifically complained about the problem of contractors being allowed to work in Iraq despite lacking the required certification.

“We have seen foreign firms blatantly violate the training requirements under their contract,” Balderas testified.

In June 2011, the CWC sent Balderas a letter thanking him for his cooperation, praising his “candid answers” and “expansive opinion on how to improve contingency contracting.”

Since its founding in 2003, Triple Canopy has undergone a meteoric rise in the private security industry. It has won nearly $2 billion in government business, most of which has been with the State Department and Department of Defense for security services in Iraq.

The company’s rapid growth has not been without controversy. In 2006, two former Triple Canopy employees sued the company claiming they had been wrongfully terminated for reporting that they saw a co-worker deliberately shoot Iraqi civilians. Triple Canopy did not deny that the shootings occurred, but it disputed the circumstances that provoked the shootings and whether any civilians were hurt. The lawsuit was eventually settled out of court for an undisclosed amount.

The CWC’s August 2011 final report to Congress pointed out that a Ugandan Triple Canopy security guard posted at Forward Operating Base Delta in Iraq committed suicide, and that guards at the base “were often ill-equipped and without basic cold-weather gear such as gloves.”

Day & Johns, the law firm representing whistleblower Omar Badr, issued this press release announcing the federal government's intervention in the case.

UPDATE: September 4, 2013

In June 2013, the U. S. District Court for the Eastern District of Virginia dismissed all of Omar Badr’s claims and most of the government’s claims. You can read the Court’s opinion and dismissal order here. The following month, the Court threw out the government’s remaining claims.