War-zone contractor settles whistleblower lawsuit alleging fraud

ALEXANDRIA, VA, Oct. 10, 2014 -- An American war-zone contractor in Afghanistan has paid the federal government $575,000 to settle a whistleblower lawsuit brought by Phillips & Cohen LLP that alleged the contractor inflated its bills for material used to build forward operating bases for US troops.

RECON International LLC allegedly defrauded the US by billing the government for more gravel than the company actually delivered, according to the "qui tam" (whistleblower) lawsuit. RECON, which has contracts to supply many services to the US in Afghanistan, is incorporated in Louisiana but based in Dubai, UAE.

The whistleblower, worked for RECON for several years in Afghanistan. After he learned about the alleged inflated bills for gravel and other problems with RECON's practices, he reported his concerns to his superiors. They ignored his complaints. The company later fired him in 2010.

To stop the alleged fraud, Stinson filed in 2011 a "qui tam" lawsuit in federal district court in Alexandria, Virginia, alleging False Claims Act violations.

Matthew Smith, a whistleblower attorney with Phillips & Cohen, who also worked on the case. "He was a 'company man,' but he felt strongly that a company shouldn't rip-off the government, particularly when serving US troops."

Under the False Claims Act, Stinson will get a whistleblower reward for his help. The law says whistleblowers shall be rewarded with a percentage of the government's recovery when their qui tam cases result in the government recovering funds.

A separate settlement covers Stinson's retaliation claims against RECON. The False Claims Act has provisions to protect whistleblowers against retaliation by employers.