- The Washington Times - Thursday, March 9, 2006


A federal jury yesterday ordered military contractor Custer Battles to pay nearly $10 million in damages and penalties for defrauding the government on its work in Iraq.

“Americans are fighting and dying in Iraq,” said Alan Grayson, the lead attorney for two whistleblowers who brought the civil suit on behalf of the government. “Companies like Custer Battles go there with the idea of stuffing their pockets with cash.”

The jury made its decision after a contentious three-week trial featuring charges that Custer Battles used fake invoices, forgery and shell companies in the Cayman Islands to run up millions of dollars in profits.

The focus of the case was a $3 million advance Custer Battles received from the Coalition Provisional Authority, the U.S.-led agency that ran Iraq after the dictatorship was toppled, to build three camps to distribute Iraq’s new currency.

Defense attorney David Douglass said his clients did nothing wrong.

“In our view, they billed the appropriate amounts,” he said.

He also said he thought the legal question remains as to whether the Coalition Provisional Authority was an agent of the U.S. government.

Whistleblowers Robert Isakson and William Baldwin were former business associates of Custer Battles. Former Army Rangers Scott Custer and Michael Battles co-founded Custer Battles, which had offices in Rhode Island and Virginia.

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