Iraq and Afghanistan Reconstruction Fraud

The United States Government continues to fund reconstruction projects in Iraq and Afghanistan. As of 2012, over $51 billion has already been spent on those reconstruction efforts. Congress has appropriated more than $60 billion for the rebuilding of Iraq, and nearly $89 billion for the rebuilding of Afghanistan – more than the United States has ever spent on the reconstruction of any other nation. From its inception, Iraq reconstruction has been plagued by fraud and abuse. The Special Inspector General for Iraq Reconstruction (SIGIR) has estimated that the U.S. Government has lost between $6 billion and $8 billion due to fraud or waste in the rebuilding of Iraq. Likewise, according to a report of the Special Inspector General for Afghanistan Reconstruction (SIGAR), there are substantial, similar risks of fraud, waste, and abuse in the rebuilding of Afghanistan as well.

Contractors rebuilding Iraq and Afghanistan who engage in, or have engaged in, fraudulent practices and, as a result, submit false claims to the Federal Government may be in violation of the False Claims Act. Examples of the type of fraudulent practices that may give rise to whistleblower lawsuits under the False Claims Act include failure to build according to specifications or perform required testing, double or excessive billing, and billing for products and services not provided.

Real World Examples of Recent Iraq Reconstruction Fraud False Claims Act Cases:

  • 2012: A subsidiary of Alcatel-Lucent paid $4.2 million to resolve allegations in a whistleblower lawsuit that it violated the False Claims Act. The whistleblower, a former contract manager, alleged that the company submitted inaccurate and misleading certifications stating that it had completed required testing of an Iraqi first responder communications system built by the company and, as a result, submitted false claims to the government. The former contract manager received $758,000 as a result of the settlement.
  • 2011: DynCorp International and The Sandi Group paid $7.7 million and $1.01 million, respectively, to settle a whistleblower lawsuit alleging that DynCorp submitted overpriced claims for payment regarding the construction of container camps throughout Iraq and that The Sandi Group improperly sought reimbursement for danger pay that it never paid to its employees. The whistleblowers, former employees of The Sandi Group, received an award of up to $481,710.

For a free consultation about a potential Iraq and Afghanistan reconstruction fraud case, other FCA fraud, or other potential whistleblower case, please call us or click here to submit your information.