Armor Group North America (AGNA) and Affiliates Pay $7.5 Million to Resolve False Claims Act Allegations on US Embassy Kabul $189 Million Guard Contract

I have posted here previously about the lawsuit filed by James Gordon, the former ArmorGroup North America (AGNA) Director of Operations under a False Claims Act whistleblower retaliation case against his former employer relating to the U.S. Embassy Kabul guard contract (see Lawsuit Filed Against US Embassy Kabul Contractor AGNA (Friday, September 11, 2009).

Today this statement was released by the Justice Department’s press shop:

WASHINGTON – Armor Group North America Inc. (AGNA) and its affiliates have paid the United States $7.5 million to resolve allegations that AGNA submitted false claims for payment on a State Department contract to provide armed guard services at the U.S.   Embassy in Kabul, Afghanistan, the Justice Department announced today. The settlement resolves U.S. claims that in 2007 and 2008, AGNA guards violated the Trafficking Victims Protection Act (TVPA) by visiting brothels in Kabul, and that AGNA’s management knew about the guards’ activities. The settlement also resolves allegations that AGNA misrepresented the prior work experience of 38 third country national guards it had hired to guard the Embassy, and that AGNA failed to comply with certain Foreign Ownership, Control and Influence mitigation requirements on the embassy contract, and on a separate contract to provide guard services at a Naval Support Facility in Bahrain. 

The settlement resolves a whistleblower suit filed in the U.S. District Court for the District of Columbia.   The lawsuit was initially filed under seal by James Gordon against AGNA, ArmorGroup International plc, G4S plc and Wackenhut Services Inc. under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals, called “relators”, to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant.   Mr. Gordon will receive $1.35 million of the settlement proceeds.   During 2007 and early 2008, Mr. Gordon was employed by AGNA, as its director of operations. 

The case remained under seal to permit the United States to investigate the allegations and determine whether it would join the lawsuit.   Under the False Claims Act, the United States may recover three times the amount of its losses, plus civil penalties.   On April 29, 2011, the United States joined the suit. 

“These contracts are put in place to provide essential support to personnel who are serving in our missions overseas,” said Tony West, Assistant Attorney General for the Civil Division.  “The Department of Justice will actively pursue its legal remedies where contractors falsely claim taxpayer dollars for services that fall short of material requirements in their government contracts.”

“Americans deserve to know that their tax dollars are being spent wisely and consistent with our values,” said U.S. Attorney Ronald C. Machen Jr. “Our office has targeted government contractors who fail to meet their obligations to the American people. With this settlement, the U.S. Attorney’s Office for the District of Columbia has now recovered more than $140 million in False Claims Act cases so far this year.”

“The Department of State appreciates the work done by the Department of Justice and the Office of the Inspector General in bringing this case to resolution. The Department of State  takes any allegation of contractor misconduct seriously and works as part of the inter-agency community to ensure it is adjudicated properly,” said Ambassador Eric J. Boswell, Assistant Secretary of State for Diplomatic Security.

The Deputy Inspector General for the Department of State, Harold Geisel, said, “We’re pleased with the successful resolution of this case, and I commend the dedication of our OIG investigators.   Our efforts should reinforce to American taxpayers that oversight of their tax dollars is taken seriously.”

Assistant Attorney General West and U.S. Attorney Machen thanked the joint investigation team, which includes Special Agents with the Department of State Office of Inspector General, and representatives from the Department of State and the Department of the Navy, for their efforts in the investigation of this matter.

Senate documents indicate that on March 12, 2007, the State Department awarded a $189 million contract to provide security services at the U.S. Embassy in Kabul, Afghanistan, to ArmorGroup North America, Inc. (“AGNA”), a subsidiary of the British-owned ArmorGroup International. Under the contract, AGNA is required to provide “a highly-trained, professional security force” to “protect life and property, prevent unauthorized access, maintain order, and deter criminal activity in and around the U.S. Mission in Afghanistan.”

So —  $7.5 million to resolve allegations with Mr. Gordon receiving $1.35 million of the settlement proceeds.  For a contract worth $189 million dollars, that’s a pretty good deal.

In fall 2010, Danger Room notes that a task order issued by the State Department under the Worldwide Protective Services to protect the U.S. Embassy in Kabul went to EOD Technology, “a global firm which has in the past guarded the British and Canadian embassies in the Afghan capital:

“And that means ArmorGroup North America — last seen with its guards taking tequila shots out of each others’ butts and engaging in extracurricular sex trafficking — has lost a contract worth nearly $274 million over five years.”

In March this year, reported that the State Department has fired EOD Technology, based in East Tennessee less than six months after the company won the $274 million job and three months after federal agents raided its headquarters.

The State Department said then that ArmorGroup will be extended for at least the next four months while it assesses options for replacing EOD Technology. Which means the State Department is struck with ArmorGroup North America until this month. Or longer if there is a search for a new contractor.

Related posts:
Kabul Embassy Security Force contract now combined with Baghdad Embassy contract and WPPS II into one base Worldwide Protective Services (WPS) contract (Thursday, October 28, 2010)

Lawsuit Filed Against US Emb Kabul Contractor AGNA (Friday, September 11, 2009)

POGO writes to Secretary Clinton about US Embassy Kabul Guards (Tuesday, September 1, 2009)

Security Contracts at US Embassy Kabul (Friday, June 12, 2009)

Related item:
New Information About the Guard Force Contract at the US Embassy in Kabul | Majority Staff Analysis | Prepared for Chairman Claire McCaskill