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Defense Contractor Billed Government for Prostitutes, Strippers, Complaint Alleges

The private security firm Blackwater is the subject of a False Claims Act (FCA) lawsuit in the United States and the company’s founder was answering questions in Abu Dhabi on August 23rd.  Erik Prince, the company’s founder, moved to the United Arab Emirates this past month, and the plaintiff’s attorney had to travel to that country to get a deposition from Mr. Prince.

The lawsuit alleges that Mr. Prince and his companies defrauded the federal government out of money by billing the State Department for excessive and inappropriate items (this type of claim). The whistleblowers in this case, Brad and Melan Davis, are former employees who claim to have inside knowledge of the fraud that took place inside Blackwater.  Of the more egregious claims are that Blackwater billed the State Department for prostitutes in Afghanistan (classified as “Morale Welfare Recreation”) and strippers for workers in Louisiana following Hurricane Katrina (classified as “cleaning services”).  If the allegations prove true, the company may be liable for treble damages under the FCA.

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