Qui Tam

Major False Claims Act Victory for Whistleblowers in Iraq Fraud Case: Fourth Circuit Reverses Custer Battles Decision

By Finch McCranie, Esq.

In a major victory today for whistleblowers reporting fraud in the Iraq reconstruction effort, the Fourth Circuit Court of Appeals reversed a trial court's decision that took away a jury verdict from the whistleblower or relator in this qui tam case under the False Claims Act.

The Custer Battles case has been a hard-fought one, which until this decision had produced one of the odder results found.

With hundreds of billions of U.S. dollars spent on the Iraq War and Iraq reconstruction, and with the False Claims Act supposedly protecting U.S. taxpayer funds from fraud, the whistleblower filed a qui tam case under the False Claims Act that alleged fraud in certain contracts to replace Iraqi currency in the Iraq reconstruction effort.

After the jury awarded a verdict to the whistleblower, the trial court overturned it. The trial court did not view claims presented to the Coalition Provisional Authority (?CPA?) as the same as claims presented to the U.S. Government, even though these officials were U.S. Government employees, and U.S. dollars were lost.

This is a very positive development for whistleblowers reporting fraud in Iraq and elsewhere, as it corrects a strained interpretation of the law that has allowed fraud to go unaddressed.

The Court's conclusion from the actual decision today is below.

Full post as published by Whistleblower Lawyer Blog on April 10, 2009 (boomark / email).