Firm once known as Blackwater faces another suit

July 14, 2011 - 6:14 PM

ALEXANDRIA, Va. (AP) — A current worker and a former employee of the security contractor previously known as Blackwater have filed a whistleblower lawsuit against the company, the second such suit filed against the firm, according to documents unsealed Thursday.

The lawsuit in U.S. District Court alleges that Blackwater, now known as Xe, overbilled the government for work protecting State Department employees in Iraq and Afghanistan. Part of the alleged fraud included billing for sniper services from individuals who were not properly qualified.

Specifically, the lawsuit alleges that Blackwater billed the State Department for sniper services from one individual who sat behind a desk. In at least one other case, the company allegedly billed for services provided by a marksman who had failed a required drug test.

A spokesman for Moyock, N.C.-based Xe declined comment Thursday, citing the pending legal action. The company has denied similar allegations in the past.

Court papers do not spell out exactly how much the State Department allegedly overpaid for Blackwater's services. The whistleblowers' lawyer, Susan Burke, declined comment Thursday. The two plaintiffs, Lyle Beauchamp of Musselshell, Mont., and Warren Shepherd of Springfield, Mo., also declined comment.

The case was filed under seal in April but a federal judge in Alexandria unsealed it Thursday. The case is filed under a federal law, the False Claims Act, which allows the plaintiffs to keep a portion of any money awarded to the government as compensation for the alleged fraud.

A similar case filed in 2008 by former Blackwater employees Brad and Melan Davis is scheduled to go to trial this month. Burke also represents the Davises. In that case, the judge has tossed out some of the Davises' claims against the company, but allowed others to go forward.

The two cases are similar in the broadest sense, in that they both allege fraud by the company overbilling for its services on the security contract. But the details of the alleged fraud cases differ in the details.

Beauchamp and Shepherd are expected to testify at the trial of the case brought by the Davises.

Under normal circumstances, the most recent lawsuit would remain under seal while the U.S. government evaluates whether it wants to join the case as a plaintiff. But the case was unsealed this week so that Beauchamp and Shepherd could be deposed and testify in the other case without violating the requirement to keep their own case secret.

The whistleblower suits are among several legal battles that the company has fought following its contract work in Iraq and Afghanistan. The company has been trying to rehabilitate its image since a 2007 shooting in Baghdad killed 17 people, outraging the Iraqi government and leading to federal charges against several Blackwater guards.

Those accusations were thrown out after a judge found prosecutors mishandled evidence, but the case was revived by a federal appeals court.