100 Fed. Cl. 502
Fed. Cl.2011Background
- Hurricane Katrina damaged the Gulf Coast; FEMA contracted Alcatec to maintain mobile homes and deactivate units under CLINs 1000–1002 after initial foreign contractors; CLIN 1000 fixed price was $6,111,000 with a phase-in period (May 2006); FEMA later reduced the phase-in payment due to an asserted unit count discrepancy and a modification was needed; PMIs for CLINs 1001–1002 were to be monthly, at least 14 days apart, billed via reverse-chronology documentation; Alcatec’s operations relied on CrossForms and a call-center, later shifted to in-house management, with Barbour as Managing Member and Oliver as COO; duplications and out-of-month billings arose, aided by undated PMI checklists and supervisory signatures being inconsistently applied; the FBI conducted a raid, seized documents, and Alcatec conducted internal analysis post-raid; navigant’s later analysis identified numerous duplicates and timing issues affecting invoices.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff’s invoicing constituted a forfeitable fraud under §2514 | Plaintiff argues any over-billing resulted from error, not intent to defraud | Defendant argues a deliberate scheme led by Barbour and Oliver inflated invoices | Forfeiture awarded; fraud proven by clear and convincing evidence |
| Whether FCA claims are proven and damages/penalties appropriate | Plaintiff contends no knowledge of fraud and argues insufficient proof tying invoices to false claims | FCA proven by preponderance; checklists falsified; penalties warranted | FCA liability sustained; penalties of $77,000 and $275,050 awarded; damages denied due to lack of coherent damages analysis |
| Who is the proper agency for fraud—corporate liability via officers/agents | Alcatec not bound by field-office actions not involved in invoicing | Barbour and Oliver acting for Alcatec bind the company | Alcatec bound by actions of Barbour and Oliver; corporate liability established |
| Whether forfeiture extends to phase-in costs under CLIN 1000 | Phase-in costs linked to contract performance should be recoverable | If fraud affects the contract, all related claims may be forfeited | Phase-in claim forfeited under §2514; related CLIN costs forfeited |
Key Cases Cited
- Daewoo Eng’g & Constr. Co. v. United States, 557 F.3d 1332 (Fed.Cir. 2009) (clear & convincing standard for fraud against government)
- Kellogg Brown & Root Servs., Inc. v. United States, 99 Fed.Cl. 488 (Fed. Cl. 2011) (fraud in proof of a claim voids contract claims under forfeiture statute)
- Young-Montenay, Inc. v. United States, 15 F.3d 1040 (Fed.Cir. 1994) (preponderance standard for damages under FCA; damages not always required)
- Little v. United States, 152 F.Supp. 84 (Ct.Cl. 1957) (forfeiture when contract-based fraud is proven)
- Kamen Soap Prods. Co. v. United States, 124 F.Supp. 608 (Ct.Cl. 1954) (circumstantial evidence can establish fraud)
- United States ex rel. Aflatooni v. Kitsap Physicians Serv., 314 F.3d 995 (9th Cir. 2002) (need for proof that specific invoices were false)