CORPORATE CRIME REPORTER
False
Claims Case Filed Against ITT Not Under Seal, Then Under Seal
21 Corporate Crime Reporter 5, January 24, 2007
A False Claims Act lawsuit has been filed against ITT.
The lawsuit was filed in federal court in Manhattan by Leonard H. LeBlanc III.
LeBlanc is being represented by Alan Grayson.
The usually talkative Grayson would not comment about the case.
And here’s why: apparently the case was supposed to be filed under seal, but wasn’t.
Last week, wire service reporters got a hold of it.
And now the allegations are floating all over the web.
And now the complaint is back under seal.
Four hundred False Claims Act lawsuits are filed every year.
And according to Patrick Burns of Taxpayers Against Fraud, this kind of mess-up happens maybe once a year – one out of 400.
“It looks like the clerk messed up,” Burns said. “Not that many federal cases are actually filed under seal. And the clerk might not have known what it means to file a case under seal.”
Burns said that all False Claims Act lawsuits are required to be filed under seal.
“The seal does three important things,” Burns said. “It protects the ability of the Justice Department to investigate the case before the company starts firing people and burning files. Second, it protects the whistleblower who may be in the company or who be in a battle theater of operation. Third, it protects the company, which in fact may be innocent of all charges. This is a three way loss – bad for the company, bad for the government, bad for whistleblower.”
In the lawsuit, LeBlanc alleges that ITT overbilled the government for security guard services in Bosnia.
ITT had a $205 million contract to protect the 20,000 Army forces stationed at Task Force Eagle in Bosnia – the U.S. contingent of the international stabilization force in post-war Bosnia.
The lawsuit alleges that “ITT billed the Army for the number of employees required, not the number of employees actually provided.”
So, for example, the required number of staff at Brcko Base was 66.
But according to the complaint, “the actual number of staff that ITT provided at Brcko Base was usually less than 40.”
“Sometimes it was as low as 33, or half of the staff required,” the complaint alleges. “It was never more than 48, much less as much as 66.”
Such “ghost-posting” occurred at other bases secured by ITT as well, the complaint alleged.
“ITT deliberately perpetuated the short-staffing in order to boost profit,” the complaint alleged.
LeBlanc
alleges that he and other ITT employees complained to the Army about the short-staffing.
The Army told ITT.
ITT’s response?
“ITT then informed its staff that any ITT guard speaking to the U.S. Army for any reason would be dismissed immediately,” the lawsuit alleges.
ITT spokesperson Thomas Martin issued a statement saying that “this is the first complaint about our performance under this contract that we have received and all of the prior reviews we received from the government concerning this contract were favorable.”
“The
contract concluded last year,” Martin said. “We have not been informed
of any issues or concerns from our government customer. We intend to defend
this lawsuit vigorously."
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