Court Rules that lawsuit against Custer Battles Can Go AheadSomervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas


Court Rules that lawsuit against Custer Battles Can Go Ahead

12 July 2005 at 5:03:53 AM

Background- Custer Battles, it is claimed, defrauded the US government but said they couldn't be sued because the money paid to them was by the US led Coaltion Provisional Authority.

In what is seen as a test case for U.S. companies working in Iraq, the judge left open a key question over the legal status of the U.S.-led occupation authority that paid the contractor and whether it was subject to U.S. law.

The case involves Custer Battles, an upstart security firm based in Rhode Island that had a contract with the U.S.-led Coalition Provisional Authority in 2003 to guard Baghdad Airport and a later logistical deal.

Former associates of the company sued under the False Claims Act that it defrauded the U.S. government of millions, a claim Custer Battles strongly denies.

In issuing his opinion, Judge T.S. Ellis from U.S. District Court in Alexandria, Virginia, denied a motion by Custer Battles to dismiss the case on the grounds that the money involved was not drawn from U.S. funds.

The case could set an important precedent as it may mean companies doing business in Iraq can be charged with contracting fraud under U.S. law -- even though it was during the occupation. If successful, the suit could recover triple damages for the government and rewards for whistle-blowers.

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