Todd Thorpe

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DonaldR. Warren,C.B. No. 138933
Phillip E. Benson~C.B. No. 97420
Warren. BensonLaw Group
7825Fay Ave., Suite200
La Jolla,CA 92037
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Telephone:(858) 456-1900
FacsImile:(858) 454-5878
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Attorneysfor Qui TamPlaintiffs
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRI CT OF CALIFORNIA
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WESTERN DIVISION.
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UNITED STATESOF AMERICA
12 WESLEY TODD THORPEAND
SALIM BENNETT,
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Plaintiffs,
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15 v.
16 HALLIBURTON COMPANY;
KELLOGG BROWN & ROOT
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EMPLOYEES
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INTERNATIONAL, INC.,
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Defen;dants
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Os,
-08924
CASENO.
COMPLAINT FOR VIOLATION OF
THE FEDERAL FALSE CLAIMS
ACT 31 V.S.C. §3729,et seq.
JURY DEMAND
LODGED UNDER SEAL
PURSUANT TO 31 V.S.C. §§
3730(b)(2)and (3)]
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Qui TamPlaintiffs WesleyTodd Thorpe("Thorpe") and SalimBennett
("Bennett") allegeas follows:
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I.
WesleyTodd Thorpe("1
) and Salim Bennett ("Bennett"), on
26 behalf of the United States,bring,this
27 penaltiesunder the FalseClaimsAct,
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to. recover
" treble damages and civil
V.S.C. §§ 3729 - 33.
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This action is basedupon the defendants'knowingly submitting,or
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causingto be submitted,false claimsandknowingly using, or causingto be used,
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falserecordsor statementsto get falseclaimspaid, by systematicallyinflating
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labor costsincurredon the LogisticsCivil AugmentationProgram(LOGCAP)III
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contractin Iraq, Afghanistanandothercountriessupportedby LOGCAP III.
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II.
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JURISDICTION AND VENUE
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28 U.S.C. §§ 1331and 1345. The Court may exercisepersonaljurisdiction over
the defendantspursuantto 31 U.S.C. § 3732(a).
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transactbusinessin this District.
III.
PARTIES
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Venueis properin the CentralDistrict of California under31 U.S.C.
§ 3732 and28 U.S.C. §§ 1391(b)and(c) becausethe defendantsresideand
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The Court hassubjectmatterjurisdiction to entertainthis actionunder
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Qui TamPlaintiff WesleyTodd Thorpe("Thorpe") is a residentand
citizen of the United States.He currentlyresidesin the Stateof North Carolina.
Thorpewashired by HalliburtonIKBR in August 2005 as a plumber(Exhibit 2).
He was assignedto work in Iraq for KBR, in supportof LOGCAP III, on August
23,2005, and assignedto CampSpeicherfor approximatelythreeweeks,Forward
OperatingBase("FOB") Remagenfor approximatelythreeweeks,andFOB
BrassfieldMora until December15,2005. Prior to his employmentwith
Halliburton/KBR, Thorpeworked asa licensedplumber. Although hired by
Halliburton/KBR, Thorpeexecutedhis employmentcontractwith KBR subsidiary,
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ServiceEmployeesInternational,Inc. ("SEll"). During his work in Iraq, Thorpe
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wasunderthe direction,policies andproceduresof KBR. SEll servedonly asan
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employmentservicescompanyfor Ha1liburton/KBR.
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QuiTamPlaintiffSalimBennett
is aresidentandcitizenof the
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United States.He currentlyresidesin the Stateof Florida. Bennettwashired by
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HalliburtonlKBR in August 2004 asa carpenter.He was assignedto work for
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KBR at KandaharAir Basein Afghanistan.insupportof LOGCAP III wherehe
waslocateduntil he resignedin August2005. Although originally hired as a
carpenter,BennettbecameAdministrativeSpecialistin chargeof processing
timesheets.Like Thorpe,Bennettwashired by HalliburtonIKBR, executedhis
employmentcontractwith SEII, andworkedunderthe direction,policies and
proceduresof KBR. Prior to his employmentwith HalliburtonIKBR, Bennett
worked asa constructioncontractorfor the Florida Departmentof Transportation.
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DefendantHalliburton Company("Halliburton") is a for-profit
corporationthat providesproductsandservicesto the oil and gasindustries. The
companyemploysmorethan 100,000peoplein over 120 countriesthroughits five
major operatinggroups,including KBR. Halliburton is basedin Houston,Texas,
and doesbusinessthroughoutthe United States,including in the CentralDistrict
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of California..
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DefendantKellogg Brown & Root ("KBR") is Halliburton's
engineeringandconstructiondivision subsidiary. KBR is divided into two
distinct divisions: the Energy& ChemicalsDivision and the Government&
InfrastructureDivision. The Government& InfrastructureDivision providesa
broadrangeof servicesto the military and civilian branchesof governments
aroundthe world. KBR is alsobasedin Houston,Texas,and doesbusiness
throughoutthe United States,including in the CentralDistrict of California.
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DefendantServiceEmployeesInternational,Inc. ("SEII") is a wholly-
ownedsubsidiaryof KBR that providesemployeeandpaYroll servicesfor KBR.
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SEll is a foreign entity, incorporatedin the CaymanIslandswith its principal place
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of businessin Dubai, United Arab Emirates.
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Qui TamPlaintiffs' Complaint
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IV.
GENERAL ALLEGATIONS
The LOGCAP Contract
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Sincethe early 1990s,the Departmentof Defense("000") hasused
logistics support contracts to meet many of its logistical support needs during
combat operations, peacekeepingmissions, and humanitarian assistancemissions.
More recently, these contracts have supported contingency operations such as
Operation Enduring Freedom and Operation Iraqi Freedom as a major part of
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America'sGlobal War on Terrorism. Simply put, suchcontractsarethe DOD's
9 relianceon civilian contractorsto provide suppliesand servicesto the military.
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In 1992,000 createdthe Logistics Civil AugmentationProgram
11 (LOGCAP) contractas an umbrellasupportcontractto provide all the support
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services
necessary
in a conflict. TheArmy awardedthefirst LOGCAPcontract
13 (LOGCAPI) in 1992to KBR. SupportserviceswereprovidedunderLOGCAPI
14 to contingencyoperationsin Haiti, Somaliaandthe Balkans. In 1997,LOGCAP
15 (LOGCAPII) was awardedto DynCorpServicesto continueservicesin the
16 Balkans. In 2001,LOGCAP III was awardedto KBR that, today,supports
17 contingencyoperationsin Iraq, Kuwait, Afghanistan,Djibouti, Republicof
18 Georgia,andUzbekistan. The LOGCAP III contractis a cost-plusawardfee
19 contract. Under LOGCAP III, TaskOrdersareissuedwith specific Statementsof
20 Work for designatedareas.The LOGCAP III contractguaranteesthe contractor
21 40 hoursper week for eachworker working on the LOGCAP III services.Any
22 hoursworked over 40 hoursper week arepaid by the United Stateson a straight
23 timerateandmustbebackedup by supporting
documentation.
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In December2001,LOGCAP III, contractDAAA09-02-D-OOO7,
was
25 awardedto KBR that includedservicesupportto U.S. Military andMulti-National
26 Forcebasesin Iraq andAfghanistan. In April 2005,Task Order 89 was issuedto
27 KBR, for specificservices,asoutlinedin theStatement
of Work,at various
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Plaintiffs'
Complaint
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Includedin the Statementof Work is the requirementthat KBR
government.O&M includes,but is not limited to, structures/facilitiesusedas
living andoffice andwork space,waterandsewer,andelectricalcomponents
In orderto performthis service,KBR, throughSEll,
triciansand otherconstruction
Employees, as part of their employmentcontract,were
alary. All hours
time rate.
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False Claims Made
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From approximatelyDecember2001to present,defendantsdefrauded
the DOD by systematicallyinflating, andcausingto be inflated, labor costs
incurredon the LOGCAP III contractin Iraq, Afghanistanand othercountries
KBR routinely instructedthe LOGCAP III
7 daysper week,on
It is
In addition,HalliburtonJKBRhas systematicallyinflated
employeesnecessaryto perfonn the servicesunderthe contract.
They alsohaveinflated labor costsby duplicatingwork ordersfor the samejob
It is allegedthe
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KBR's timekeepingpolicy andtimesheetandwork hoursguidelines
III Contractmandatesa goal of 84 hoursto be chargedby their
In addition,managersandsupervisors,as a management
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corporate84 hour work week mandate.KBR's timekeepingpolicy coversSEll
employeesassignedto LOGCAP III. The KBR policy doesnot requireany
explanationby the employeefor hourschargedup to 12 hoursper day or 84 hours
per week. Conversely,the employeesarerequiredto submit a written explanation
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for their fail to turn in timesheetstotaling 12hoursper day.
15.
Shortly after beinghired by Halliburton/KBR, Qui TamPlaintiff
Thorpewas sentto Iraq asa plumberto work on DOD ContractDAAA09-02DOO07,TaskOrder 89. He arrivedin Iraq on August 23,2005 andwas first
assignedto CampSpeicher.Within two days,he, along with 30 to 40 othernew
employees,attendedan in-processingmeetingpresidedover by a KBR Human
Resourcesrepresentative.The HR representativeinstructedthe employeesto log
12hoursof work per day, sevendaysa week,on their timesheetsfor a total of 84
hoursper week andthey mustprovide a written explanationif their timesheets
failed to show 12hoursper day. Compensationon the employees'employment
contractsguaranteedpaymentfor 40 hoursper week andthat all hoursworked
over 40 hoursper week would be paid at a straighttime rate.
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Thorpewas assignedto CampSpeicherfor approximatelythree
weeksas a plumber. It is estimatedKBR had 2000 employeesassignedto
Speicher.From conversationsThorpehad with manyof his co-workers,every
employeeat Speicherwas charging12hoursper day on their timesheetseven
thoughthey actually only worked2 or 3 hoursper day. The KBR time sheetis
titled "GovernmentOperationsWeeklyTimesheet." It is alwayspre-printedwith
the "AttendanceCode" of "0601II - the chargecodefor "RegularWork." When
not working, the employeeswerenot on a standbystatus. "Standby"hourswould
be coded"0617." The standbycodewasneverprinted on the time sheet. Hours
on the time sheetwere filled in on a daily basisby eachemployeeandwerekept in
a box at a centrallocation. Thorpe,andthe otheremployees,werepaid for the
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Qui TamPlaintiffs' Complaint
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total 12 hoursper day,but 12hourswereneverworked. Work was only doneby
work order. The \'lork orderwas called"ServiceWork Order" andissuedby KBR
supervisors.Eachwork orderwould describethejob to be doneandwas signed
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by the employeewhen the work was completed.No work was doneunlessa work
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orderwas issued.
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After threeweeksat CampSpeicher,Relatorwas assignedto FOB
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Remagen.KBR supervisorsat Remagenreinforcedthe needto charge12hours
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per day on the timesheets.It is estimatedKBR had 165employeesassignedto the
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FOB. Every employeecharged12hoursper day on their timesbeetseventhough
10 actualwork nom1allydid not exceed1 hour a day.
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After approximatelythreeweeksat FOB Remagen,Thorpewasre-
12 assignedto FOB Brassfield-Mora.Thorperemainedat Brassfield-Morauntil
13 December16,2005,"vhenhe returnedto the United States.As occurredat the
14 othersites,KBR supervisorsat Brassfield-Moraemphasizedthat eachemployee
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their timesheets.It is estimatedKBR had 15
16 employeesassignedto that location. During the time he was assignedto
17 Brassfield-Mora,therewasneverenoughwork to justify 12hoursa day for each
18 worker. Thorpeestimateseachworker actuallyworked approximately2 hoursper
19 day. The rest of the day wasusuallytakenup with sleeping,eating,watching
20 movies,or just sitting aroundwaiting for a work order.
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Thorpefound, throughconversationswith otherKBR workersin
22 variousparts of Iraq, that the requirementof charging 12hoursper day hasbeen
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standardoperatingproceduresinceKBR hasoperatedin Iraq.
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Qui TarnPlaintiff Bennettwashired by HalliburtonlKBR asa
carpenterto work on DAAAO9-02-DOOO7.
After spendingapproximatelya
26 month in Uzbekistan,Belmettarrived in Afghanistanin September2004 andwas
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assignedto the Utilities Departmentat KandaharAir Base. The Utilities
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Qui Tam Plaintiffs' Complaint
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Departmentwasresponsiblefor the maintenanceof the base. Shortly afterhis
arrival at Kandahar~Bennettwas told by his supervisorsthat he was to charge12
hoursa day on his timesheets. He eventuallylearnedthat managersmakeup the
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TargetWork Week Schedule~
usually a weekin advance~
with 12hourslisted for
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eachemployeein order to meetthe 84 hour per week requirement.As a result,all
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employeesare shownas"on the clock" for the 12hours daily evenif theyjust sit
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aroundwith no work to do. They thenhaveto charge12hoursdaily on their
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timesheetsto meetthe Schedulerequirements.Although Bennettwas supposedto
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work asa carpenter,his job changedfrom labor to administrativedutiesbecauseof
10 his computerknowledge. Thosedutiesincludedprocessingtimesheetsandwork
11 orders. In approximatelyDecember2004,Bennett'sdutiesformally changedto
12 AdministrativeSpecialist. As AdministrativeSpecialist,Bennettwasin chargeof
13 processingandkeepingtrack of timesheets,work ordersand daily work log sheets
14 for the Utilities Departmentthat includedanywherefrom 150to 300 workers. He
15 remainedin that position until his resignationandreturn to the United Statesin
16 August 2005.
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Bennettbecameawarethat therewasnot enoughwork for every
18 employeeto charge12hoursper day. He estimatesthat employeesworked less
19 than 8 hours a day. It was commonfor employeesto just sit aroundwaiting for
20 work, but KBR requiredthat they be shownas"on the clock" 12hourseveryday,
21 and submit 12hours on their timesheets.It is estimatedKBR had 1,500to 2,000
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employeesassignedto KandaharAir Base. All work was conductedfrom work
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ordersissuedby KBR management.Employeeswere also supposedto maintaina
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daily work log sheetthat recordedall activity whetherwork or not.
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While performinghis dutiesprocessingtimesheetsandwork orders,
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Using his computerskills, Bennettcreateda tracking databaseincorporatingdata
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Qui Tam Plaintiffs' Complaint
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from timesheets,work orders,anddaily logs in order to analyzetime charging
patterns.Bennettfound from his analysisthat hours chargedon timesheetsby
KBR employeeswere alwaysinflated. He estimatesthat, for the Utilities
Departmentalone,timesheetswereinflated by morethan 100hoursper day. In
addition,Bennettdiscoveredthat manywork orderswerebeing duplicatedmany
times over for the samejob. The duplicatedwork orderswere alwaysissuedwith
different numbers,but would describethe samejob thus inflating work hours
8 perfonnedon thatjob. From his observations,Bennettestimatesthat 60-70%of
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work orderswere fraudulent. Further,KBR hired manyemployeeswho did not
10 havethe skills to perfonn thejob for which they werehired. The resultwas that
11 multiple employeeswould often work on the samework orderwith someonewho
12 did havethe skill, but eachof the employeeswould chargefor thejob. It was
13 discoveredthat five employees,beingpaid $75,000a year,were supposedlydoing
14 the samejob processingwork ordersandthat it was a KBR management
decision
15 to do that. Bennettnotified his supervisorsof the inflated timesheets,
but nothing
16 was doneto correctthe problem. Bennetteventuallylearnedthat inflating hours
17 on the timesheetshasbeena long standingpracticeof KBR that goesback to
18 LOGCAP I in the Balkans. He observedtimesheetsbeing chargedtime for such
19 things as shoppingat the village marketplace,eating,and haircuts.
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Basedon their experiencesandobservationswith Halliburton/KBR,
Qui TamPlaintiffs areinformedandbelievethe companyknowingly inflated labor
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a. Inflating hoursworked on timesheetson a daily basisto reflect 84
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hours a week that management
requiredof everyemployeein orderto meet
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corporatemandatedgoals.
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b. Inflating costestimatesto the governmentrequiredto complete
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requiredservicesby inflating the nwnber of employeesandhoursit would
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HalliburtonIKBR systematicallysubmittedbillings to the DOD
that includedinflated labor costs.
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e. Basedon KBR's timekeepingpolicy for LOGCAP III and
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conversationswith otherKBR workers,KBRs practiceof inflating labor
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costsextendsto Kuwait, Djibouti, Republicof Georgia,andUzbekistan.
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v.
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FIRST CAUSE OF ACTION
(Violation of the Federal FalseClaims Act - 31 U.S.C. §§ 3729,et seq.)
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(Against All Defendants)
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24.
Qui TamPlaintiffs herebyrefer to andincorporateby this reference
14 eachandevery allegationsetforth in paragraphs1 through 23, inclusive.
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21.
By their conductabove,from 2001 and continuing,defendants
16 knowingly submitted,or causedto be submitted,falseclaims for paymentto the
17 United States,as set forth above,in violation of31 U.S.C. § 3729(a)(1).
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18 Additionally, defendantsknowingly madeor usedfalserecordsor statements
19 get false or fraudulentclaimspaid by the United States,in violation of31 V.S.C. §
3729(a)(2).
22. As a result of suchviolations of the FalseClaimsAct, Defendants
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22 havecausedwrongful paymentsto be madefrom the United StatesTreasury. All
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23 of this hasresultedin damageto the United Statesin the millions of dollars.
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VI.
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PRAYER FOR RELIEF
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WHEREFORE,qui tamplaintiffs pray for relief as follows:
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For threetimes the dollar amountshownto havebeenwrongfully
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Qui Tam Plaintiffs' Complaint
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chargedandpaid by the United States;
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For maximumcivil penaltiesfor all falserecords,statements,
certificationsand claims submittedto the United States,subjectto being consistent
with the ExcessiveFinesandPenaltiesClauseof the Eighth Amendmentto United
StatesConstitution;
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For the maximumstatutoryqui tam shareof the recoveryobtainedfor
the United States;
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For all other damagesallowedunderlaw, including litigation
expensesandreasonableattorneys'fees;and
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For suchother andfurtherrelief asthe court deemsjust andproper.
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JURY DEMAND
Qui TamPlaintiffs herebydemandstrial by jury.
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15 Dated: December22,2005
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Respectfullysubmitted,
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Warren. Benson Law Group
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Donald R. Warren
Attorney for Qui Tam Plaintiffs
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