United States ex rel. Beauchamp v. Academi Training Ctr., Inc.

933 F.Supp.2d 825

UNITED STATES of America ex rel. BEAUCHAMP and Shepherd, Plaintiff,

v.ACADEMI TRAINING CENTER, INC., Defendant.

Case No. 1:11cv371.

United States District Court,

E.D. Virginia,

Alexandria Division.

March 21, 2013.

Susan L. Burke, Burke PLLC, Timothy Marshall Belknap, William Edgar Copley, Weisbrod Matteis & Copley PLLC, Washington, DC, for Plaintiff.

MEMORANDUM OPINION

T.S. ELLIS, III, District Judge.

In this qui tam action ¹ brought under the False Claims Act (“FCA”),² the relators allege that defendant knowingly submitted false claims to the United States in connection with a United States Departmentof State contract to provide security services in Afghanistan. As often occurs in FCA actions, defendant here seeks threshold dismissal, arguing (i) that the relators' claims are jurisdictionally barred under 31 U.S.C. § 3730(b)(5) because they are the subject of an already pending FCA action, (ii) that the relators' claims and allegations are jurisdictionally barred because they were publicly disclosed prior to the filing of this suit and neither relator qualifies as an “original source,” as required by 31 U.S.C. § 3730(e)(4), and (iii) that the relators have failed to plead their claims in accordance with the pleading standards set forth in Rules 8(a) and 9(b), Fed.R.Civ.P.

For the reasons that follow, defendant's motion to dismiss must be granted. ³

I.

Relator Lyle Beauchamp, a Montana resident, was employed by Academi Training Center, Inc. (“Academi”) as an independent contractor on government contracts between Academi and the United States from August 2004 until May 9, 2011. Relator Warren Shepherd has been employed by Academi as an independent contractor on government contracts since 2004. Defendant Academi is a private security contractor with a principal place of business in Arlington, Virginia. ⁴ Academi provides a variety of services, including specialized training and, particularly pertinent here, protective security services in high risk environments, such as Iraq and Afghanistan.

A.

In 2005, the United States Department of State (“State Department”) awarded the Worldwide Personal Protective Services Contract II (“WPPS Contract”) to Academi. Under the WPPS Contract, Academi agreed to provide personal security services in Iraq and Afghanistan. The WPPS Contract required the independent contractors (“contractors”) deployed by Academi in protective services roles to attain and maintain a certain degree of proficiency with specified firearms, and for Academi to submit those scores regularly to the State Department. Personnel who failed to pass the initial qualification test or any intermittent qualification tests were prohibited from carrying firearms. In addition, the WPPS Contract required Academi to staff protective service assignments with appropriate contractors as specified by the Task Order.⁵ Pursuant to the WPPS Contract, a failure by Academi to staff an assignment properly would result in a deduction of $1800 per day for each protective services position that was not properly staffed and $1200 per day for each support position that was not properly staffed.

The WPPS Contract required Academi contractors to qualify for work in either a protective services personnel role or a guard role. In either role, the contractor was required to demonstrate his proficiency on five firearms: (i) the Glock 19 pistol, (ii) the Colt M4 rifle, (iii) the Remington 870 shotgun, (iv) the M240 belt-fed machine gun, and (v) the M249 belt-fed machine gun. In addition, Academi contractors assigned to the “Designated DefensiveMarksman” role (“DDM”) were also required to qualify on either the M24 or the M25 sniper rifle. Academi contractors were required to pass both initial and intermittent weapons qualifications testing. The WPPS Contract's Appendix set out procedures to be followed when Academi conducted the qualification tests. Particularly pertinent here were two requirements set forth in the Appendix: (i) qualification testing was required to be conducted by a Certified Firearms Instructor and (ii) qualification testing for the belt-fed machine guns, the M240 and M249, was required to be performed on targets different from the targets used for the other firearms qualifications testing, and importantly, was also required to include ‘no shoot’ targets to simulate the presence of non-hostile civilians.

Relators, in their Second Amended Complaint (“SAC”), allege that Academi engaged in two separate schemes to submit false claims to the State Department. First, relators allege that from April 2007 until September 2011, Academi routinely submitted falsified weapons qualification test scores for protective services personnel (“weapons qualification scheme”). Specifically, relators allege that Academi failed to conduct the M240 and M249 qualifications testing in the manner required under the WPPS Contract Appendix, (i) by not requiring Academi contractors to fire the M240 and M249 belt-fed machine guns during the qualifications testing and (ii) by performing this testing without the supervision of a Certified Firearms Instructor. Relators allege that in order to conceal this failure to conduct proper weapons qualifications testing, Academi knowingly falsified the records and fraudulently submitted these falsified records to the State Department.

Second, relators allege that Academi submitted false reports and bills to the State Department that listed contractors working in positions in which they did not actually work (“false billeting scheme”). For example, relators allege that Academi billed the State Department for a contractor's work as the shift leader of a protective services team when, in fact, that contractor was actually employed as the base's head cook. In another illustrative example, relators allege that Academi submitted claims to the State Department for a contractor filling the DDM position on a protective services team when, in fact, that contractor never actually deployed to Afghanistan with the assigned team. Put simply, relators allege that Academi systematically submitted false claims to the State Department for contractors' work in positions they never actually filled.

Relators' original Complaint was filed under seal on April 8, 2011.⁶ While the Complaint was still under seal, relators, on May 24, 2011, filed the First Amended Complaint (“FAC”).⁷ By Order dated July 14, 2011, the seal was lifted to the extent necessary to permit relators to testify in U.S. ex rel. Davis v. U.S. Training Center, Inc., No. 1:08cv1244 (E.D.Va.). See United States ex rel. Beauchamp v. Academi Training Center, Inc., No. 1:11cv371 (E.D.Va. July 14, 2011) (Order). After receiving several extensions of time to consider whether to intervene, the Government ultimately declined to do so on July 31, 2012, and thus, as required by statute, see31 U.S.C. § 3730(b)(2), the complaint was then unsealed and served on Academi. See Beauchamp, No. 1:11cv371 (E.D.Va. July 31, 2012) (Order).

On November 19, 2012, the relators filed the SAC, wherein the claims relating to failed drug screens and personal gear were dropped, and the claims relating to the weapons qualifications scheme and false billeting scheme were pled with greater specificity.

B.

Academi and its predecessors in interest are no strangers to FCA actions; in addition to this case, Academi and its predecessors in interest have been defendants in a prior FCA qui tam suit. Also, Academi, or one of its predecessors in interest, has been the subject of federal audits and news media reports regarding the submission of false claims to the Government. A brief description of these prior suits, investigations, and news media reports is pertinent to the disposition of the jurisdictional defenses of the first-to-file bar and the public disclosure bar.

1. U.S. ex rel. Davis v. U.S. Training Center, Inc.

On December 1, 2008, two relators filed an FCA qui tam suit against one of Academi's predecessor in interest. Davis, No. 1:08cv1244 (E.D.Va. Dec. 1, 2008) (Complaint). The Davis relators alleged, inter alia, that:

(i) Academi's predecessor in interest submitted false claims to the United States for the services of contractors who were unqualified to deploy to Iraq under the WPPS Contract because they had “proven themselves wholly incompetent”; and,

(ii) Academi's predecessor in interest submitted false claims to the United States by:

a. submitting a claim for the services of a prostitute;

b. submitting false claims for third party airline transportation services, when Academi's predecessor in interest was actually providing those transportation services in-house;

c. submitting claims that falsely purported to be contemporaneous travel records; and,

d. submitting false claims for certain services from third parties, who then paid kickbacks to Academi's predecessor in interest.

On April 14, 2010, the Davis relators filed their First Amended Complaint, in which they alleged that Academi's predecessor in interest submitted false claims to the State Department from June 2005 until May 2009. Specifically, they alleged three fraudulent schemes:

(i) The submission of claims that falsely reported the number of contractors that Academi's predecessor in interest deployed in both Afghanistan and Iraq;

(ii) The submission of false claims for reimbursement of inflated travel and related expenses; and,

(iii) The submission of claims that fraudulently concealed Academi's failure to ensure that contractors complied with use of deadly force provisions.

Following threshold dismissal of the First Amended Complaint, the Davis relators filed their Second Amended Complaint on July 26, 2010, in which they re-alleged the same schemes as alleged in the First Amended Complaint, albeit with somewhat greater specificity. Thus, the Davis relators alleged that the “shooters” (i.e., contractors authorized to use lethal force) were unqualified because of their drug use and their known...