Custer Battles, LLC was an American

defense contractor A defense contractor is a business organization or individual that provides products or services to a military or intelligence department of a government. Products typically include military or civilian aircraft, ships, vehicles, weaponry, and ...

headquartered in

Middletown, Rhode Island Middletown is a town in Newport County, Rhode Island, United States. The population was 17,075 at the 2020 census. It lies to the south of Portsmouth and to the north of Newport on Aquidneck Island, hence the name "Middletown." History Issue ...

, with offices in McLean,

Virginia Virginia, officially the Commonwealth of Virginia, is a U.S. state, state in the Southeastern United States, Southeastern and Mid-Atlantic (United States), Mid-Atlantic regions of the United States between the East Coast of the United States ...

. The company now appears to be out of business. At one time the company offered services that include security services, litigation support, global risk consulting, training and business intelligence, but had no background or track record in offering any of these services. In June 2003, Custer Battles took its services to Iraq and became a minor contractor supporting the

Coalition Provisional Authority The Coalition Provisional Authority (; , CPA) was a Provisional government, transitional government of Iraq established following the 2003 invasion of Iraq, invasion of the country on 19 March 2003 by Multi-National Force – Iraq, U.S.-led Co ...

and the U.S. government. In October 2004, the company was sued under the

False Claims Act False or falsehood may refer to: * False (logic), the negation of truth in classical logic * Lie or falsehood, a type of deception in the form of an untruthful statement * False statement, aka a falsehood, falsity, misstatement or untruth, is a st ...

. As this was the first lawsuit concerning contractors in Iraq, the company received significant attention throughout the media. In March 2006, a jury ruled against Custer Battles, but the verdict was set aside by a District Court judge. That decision was appealed, and, in April 2009, the Fourth Circuit reversed the district court judge and granted a new trial. According to the

Iraq War documents leak The Iraq War documents leak is the disclosure to WikiLeaks of 391,832 United States Army field reports, also called the Iraq War Logs, of the Iraq War from 2004 to 2009 and published on the Internet on 2010. The files record 66,081 civilian ...

, a Custer Battles convoy went on a shooting spree in

Umm Qasr Umm Qasr (, also transliterated as ''Um-qasir'', ''Um-qasser, Um Qasr. Kurdish: ئومقەسڕ, Ûmqêsir'') is a port city in southern Iraq. It stands on the canalised Khawr az-Zubayr, part of the Khawr Abd Allah estuary which leads to the P ...

in 2004, shooting out the tire of a civilian car that came close, and firing five shots into a crowded civilian minibus. The shooting stopped only after the Iraqi police, port security and a British military unit finally caught up with the convoy. Custer Battles employees handed over cash to avoid disciplinary action.

Background

Custer Battles, LLC., was founded in October 2001. The company was named after its founders, Scott Custer and Michael Battles. Custer is a former Army Ranger and defense consultant, while Battles is a former Army officer and

CIA The Central Intelligence Agency (CIA; ) is a civilian foreign intelligence service of the federal government of the United States tasked with advancing national security through collecting and analyzing intelligence from around the world and ...

intelligence officer An intelligence officer is a member of the intelligence field employed by an organization to collect, compile or analyze information (known as intelligence) which is of use to that organization. The word of ''officer'' is a working title, not a r ...

who ran unsuccessfully for the

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in 2002. The company described itself as follows:"Custer Battles, LLC, an international business risk consultancy, is a veteran owned business that provides objective risk management and security consulting services of the highest quality and within an ethical framework." It offered prospective clients an array of services ranging from global risk consulting to close personal security detail to weapons training and

Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from Bribery, bribing foreign government officials to benefit their business interests. The FCPA is applic ...

(FCPA)/Human Rights Violations inquiries, among others. From 2001-2003, Custer Battles provided crisis management and security assistance to humanitarian organizations working in high-risk conflict areas throughout the world. They were one of the first companies to establish a presence in

Kabul Kabul is the capital and largest city of Afghanistan. Located in the eastern half of the country, it is also a municipality, forming part of the Kabul Province. The city is divided for administration into #Districts, 22 municipal districts. A ...

Afghanistan Afghanistan, officially the Islamic Emirate of Afghanistan, is a landlocked country located at the crossroads of Central Asia and South Asia. It is bordered by Pakistan to the Durand Line, east and south, Iran to the Afghanistan–Iran borde ...

in January 2002, working for various

NGO A non-governmental organization (NGO) is an independent, typically nonprofit organization that operates outside government control, though it may get a significant percentage of its funding from government or corporate sources. NGOs often focus ...

s as well as the Afghan Ministry of Transportation. Domestically, they also provided

critical infrastructure protection In the U.S., critical infrastructure protection (CIP) is a concept that relates to the preparedness and response to serious incidents that involve the critical infrastructure of a region or the nation. The American Presidential directive PDD-63 o ...

in the United States, with focus on

water security The aim of water security is to maximize the benefits of water for humans and ecosystems. The second aim is to limit the risks of destructive impacts of water to an acceptable level. These risks include too much water (flood), too little water (d ...

. They had at least four statewide contracts in 2002, including

New Hampshire New Hampshire ( ) is a U.S. state, state in the New England region of the Northeastern United States. It borders Massachusetts to the south, Vermont to the west, Maine and the Gulf of Maine to the east, and the Canadian province of Quebec t ...

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, as well as contracts with various municipalities along the eastern seaboard. In May 2003, Custer Battles established a presence in

Baghdad Baghdad ( or ; , ) is the capital and List of largest cities of Iraq, largest city of Iraq, located along the Tigris in the central part of the country. With a population exceeding 7 million, it ranks among the List of largest cities in the A ...

Iraq Iraq, officially the Republic of Iraq, is a country in West Asia. It is bordered by Saudi Arabia to Iraq–Saudi Arabia border, the south, Turkey to Iraq–Turkey border, the north, Iran to Iran–Iraq border, the east, the Persian Gulf and ...

. In June 2003, Custer Battles was competitively awarded a contract to secure the

Baghdad International Airport Baghdad International Airport , previously Saddam International Airport from 1982 to 2003, () is Iraq's largest international airport, located in a suburb about west of downtown Baghdad in the Baghdad Governorate. It is the home base for Ira ...

(BIAP). The 12-month contract with the

was worth $16.8 million. The company continued to expand its business in Iraq, and became a minor subcontractor operating in the country hiring 138 people for providing security at BIAP. The company continued to expand its operations in Iraq through 2003 and 2004. Their clients included the

, Bearing Point,

Washington Group International Washington Group International was an American corporation which provided integrated engineering, construction, and management services to businesses and governments around the world. Based in Boise, Idaho, WGI had approximately 25,000 employees ...

Parsons Corporation Parsons Corporation is an American multinational technology-focused defense, intelligence, and infrastructure engineering firm. Founded in 1944, Parsons is headquartered in Chantilly, Virginia, and serves both government and private sector orga ...

Halliburton Halliburton Company is an American multinational corporation and the world's second-largest oil service company which is responsible for most of the world's fracking operations. It employs approximately 55,000 people through its hundreds of su ...

and the

United States Army The United States Army (USA) is the primary Land warfare, land service branch of the United States Department of Defense. It is designated as the Army of the United States in the United States Constitution.Article II, section 2, clause 1 of th ...

. In early 2004, the

United States Department of Defense The United States Department of Defense (DoD, USDOD, or DOD) is an United States federal executive departments, executive department of the federal government of the United States, U.S. federal government charged with coordinating and superv ...

initiated an investigation into one of Custer Battles' contracts with the CPA, resulting in the company being suspended from future contract considerations. In early 2005, Custer Battles ceased operations in Iraq.

Allegations of fraud in Iraq

Dinar exchange contract

From May 2003 to June 28, 2004, the

(CPA) was the governing body of Iraq. In July 2003, the CPA started to replace the old Iraqi dinars with portrait of Saddam Hussein with a new currency. On August 27, 2003, Custer Battles, LLC., signed a Dinar Exchange Contract with the CPA to construct and operate three money exchange facilities, in

Mosul Mosul ( ; , , ; ; ; ) is a major city in northern Iraq, serving as the capital of Nineveh Governorate. It is the second largest city in Iraq overall after the capital Baghdad. Situated on the banks of Tigris, the city encloses the ruins of the ...

, and

Basra Basra () is a port city in Iraq, southern Iraq. It is the capital of the eponymous Basra Governorate, as well as the List of largest cities of Iraq, third largest city in Iraq overall, behind Baghdad and Mosul. Located near the Iran–Iraq bor ...

. It was a Cost-Plus contract with reimbursement for actual expenses, plus 25% for overhead and profit. During signing, the $3-million advance paid with a U.S. Treasury check was handed over; a total of approximately $15 million was paid by the CPA to Custer Battles. At the end of the contract time, a document came into possession of the CPA which demonstrated that Custer Battles, LLC., inflated the invoices, for example, it charged $400,000 for electric generators for Baghdad facility while they were acquired for $74,000.''United States ex rel. DRC, Inc., et al. v. Custer Battles, LLC, et al., 562 F.3d 295 (4th Cir. 2009), Case No. 07-1220'' In October 2004, a ''

qui tam In common law, a writ of ''qui tam'' is a writ through which private citizen, private individuals who assist a prosecution can receive for themselves all or part of the damages or financial penalties recovered by the government as a result of the p ...

'' lawsuit against Custer Battles, LLC. was filed by Robert Isakson and William Baldwin, who both were employees of DRC, Inc., a Custer Battles' subcontractor. It was unsealed in the

United States District Court for the Eastern District of Virginia The United States District Court for the Eastern District of Virginia (in case citations, E.D. Va.) is one of two United States district courts serving the Commonwealth of Virginia. It has jurisdiction over the Northern Virginia, Hampton Roa ...

. The suit, ''United States ex rel. DRC, Inc. v. Custer Battles, LLC, 472 F. Supp. 2d 787 (E.D. Va. 2007)'', brought under the

, alleged massive over-billing on two contracts with the

in Iraq in 2003. In July 2005, Judge T. S. Ellis III ruled that allegations of false claims in Custer Battles' contracts with the CPA were actionable under the

, denying Custer Battles' lawyers claims that the company had no contract with the US government. The Judge also ruled that money paid for by the Development Funds for Iraq (DFI) could not be prosecuted under the False Claims Act, as the US government was not involved in administering these funds. In March 2006, a

jury A jury is a sworn body of people (jurors) convened to hear evidence, make Question of fact, findings of fact, and render an impartiality, impartial verdict officially submitted to them by a court, or to set a sentence (law), penalty or Judgmen ...

found Custer Battles liable for the submission of 5 false claims, each one of which is subject to a US$5,000 -11,000 civil fine, as well as 26 false statements supporting the 5 false claims. However, in August 2006, Judge Ellis overturned the verdict as a matter of law. Judge Ellis's ruling was, in turn, reversed in part by the

United States Court of Appeals for the Fourth Circuit The United States Court of Appeals for the Fourth Circuit (in case citations, 4th Cir.) is a United States federal court, federal court located in Richmond, Virginia, with appellate jurisdiction over the United States district court, district cou ...

in April 2009 on grounds that claims submitted by Custer Battles fell under the FCA, in effect reinstating the jury verdict. Judge Paul V. Niemeyer in ''United States ex rel. DRC, Inc., et al. v. Custer Battles, LLC, et al.'', 562 F.3d 295 (4th Cir. 2009), ruled that District Court had erred in limiting the scope of the damages on the dinar exchange contract, and gave the plaintiffs the option of seeking a new trial for additional damages., but reinstated the claims relating to the dinar-exchange contract and reversed the order limiting them to $30 million in damages granting a right for another trial.

Baghdad airport security

In addition to Dinar Exchange Contract, the CPA signed a separate Firm-Fixed Price $16.8 million contract awarded to Custer Battles to provide security at

to open it to commercial flights. Custer Battles assumed responsibility for establishing armed patrols and checkpoints, training an airport police force, and certified baggage screeners; altogether — 138 personnel. Coalition Authority's administrator responsible for transportation, Franklin D. Hatfield, stated that the contract was fulfilled "far above and beyond what was required". The same set of

whistleblowers Whistleblowing (also whistle-blowing or whistle blowing) is the activity of a person, often an employee, revealing information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe, unethical or ...

, Robert Isakson, a former

Federal Bureau of Investigation The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and Federal law enforcement in the United States, its principal federal law enforcement ag ...

agent and DRC's managing director, and William Baldwin, a former Custer Battles employee, maintained under the

that Custer Battles, LLC., defrauded the United States by not maintaining the agreed upon number of airport security staff, with Baldwin additionally claiming that he was fired in retaliation for his whistleblowing. During

trial In law, a trial is a coming together of parties to a dispute, to present information (in the form of evidence) in a tribunal, a formal setting with the authority to adjudicate claims or disputes. One form of tribunal is a court. The tribunal, w ...

, Judge T. S. Ellis III ruled that the entire contract was susceptible to the

, and not just part of it in the previous case. The basic allegations were that Custer Battles had failed to provide adequate security staffing under its Firm-Fixed Price contract of $16.8 million. In January 2007, Judge Ellis granted Custer Battles' motion for

summary judgment In law, a summary judgment, also referred to as judgment as a matter of law or summary disposition, is a Judgment (law), judgment entered by a court for one party and against another party summarily, i.e., without a full Trial (law), trial. Summa ...

, finding that there was no evidence of the submission of false claims in this case. In April 2009, the 4th Circuit appeals court affirmed summary judgment for Custer Battles on the Baghdad airport contract. Therefore, the Airport Contract claim was denied legal standing but the Dinar Exchange Contract and retaliation claims from the Airport Contract proceeded to trial.

Custer Battles files conspiracy lawsuit

In April 2005, Custer Battles filed conspiracy and

breach of contract Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other part ...

lawsuits against Robert Isakson and William Baldwin, the same individuals who had previously accused Custer Battles of submitting false claims. The lawsuit also included Isakson and Baldwin's companies, DRC Inc and American Iraqi Solutions Group, both of Alabama. According to court documents filed in the U.S. District Court for the Eastern District of Virginia, Mr. Isakson breached his contract with Custer Battles when he brought his 12-year-old son to Iraq by vehicle from

Amman Amman ( , ; , ) is the capital and the largest city of Jordan, and the country's economic, political, and cultural center. With a population of four million as of 2021, Amman is Jordan's primate city and is the largest city in the Levant ...

, Jordan with $9,000 in cash strapped to his chest. Custer Battles also alleged that Isakson and Baldwin conspired to start a new company, American Iraqi Solutions Group (AISG) and stole away Custer Battles clients. This case was eventually moved from the

to the

United States District Court for the Southern District of Alabama The United States District Court for the Southern District of Alabama (in case citations, S.D. Ala.) is a federal court in the Eleventh Circuit (except for patent claims and claims against the U.S. government under the Tucker Act, which are app ...

. Before going to trial, a settlement was reached and Custer Battles dismissed the charges. The amount of money paid by DRC, Isakson and Baldwin has been kept confidential.

Allegations of unrestrained force

In February 2005,

Lisa Myers Lisa Myers (born Joplin, Missouri) is a retired American journalist. She was the senior investigative correspondent for ''NBC Nightly News''. A 1973 graduate of the University of Missouri's Missouri School of Journalism in Columbia, Missouri, sh ...

MSNBC MSNBC is an American cable news channel owned by the NBCUniversal News Group division of NBCUniversal, a subsidiary of Comcast. Launched on July 15, 1996, and headquartered at 30 Rockefeller Plaza in Manhattan, the channel primarily broadcasts r ...

News reported a story concerning allegations of unrestrained force on the part of Custer Battles security operators in Iraq. In the story, four former Custer Battles employees are quoted as witnessing an incident where a Custer Battles vehicle rolled over a civilian vehicle and injured the occupants inside. The employees also detail an incident where Kurdish guards shot indiscriminately towards Iraqi civilians. According to one of the employees, Bill Craun, "what we saw the American public wouldn't stand for."U.S. contractors in Iraq allege abuses: Four men say they witnessed brutality
By Lisa Myers and the NBC investigative unit. ''NBC Nightly News.'' Aired February 17, 2005. In response to the allegations, Myers interviewed the Iraq director and convoy leader for Custer Battles. The convoy leader, Shawn Greene, adamantly denied that any of these incidents occurred, and detailed the exact incident in which he ordered the Custer Battles truck to hit and forcibly move a civilian vehicle. According to Greene, while his vehicle did damage the civilian car, there were no injuries. Paul Christopher, the Custer Battles country director, provided NBC News access to the company's mission logs, which detailed the event of hitting a civilian vehicle, the subsequent investigation with photos, and the documentation from the driver and witnesses that no one was injured. Both Greene and Christopher did detail accounts of actual combat situation of Custer Battles personnel where their vehicles were attacked by insurgents and Custer Battles personnel were forced to defend themselves through the use of deadly force.

Jacqueline Battles arrested trying to secrete funds

In September 2006, Jacqueline Battles, the wife of Michael Battles, was arrested in Germany after a German bank informed authorities about "suspicious transactions" on her accounts. German investigators seized about US$1 million from her accounts. Jacqueline Battles was subsequently released and no charges were filed.Deborah Hastings

''The Associated Press'', August 4, 2006.

In the courts

*''United States ex rel. DRC, Inc. v. Custer Battles, LLC ("DRC I"), 376 F. Supp. 2d 617 (E.D. Va. 2005)'' — the motion was granted in part. *''United States ex rel. DRC, Inc. v. Custer Battles, LLC, 472 F. Supp. 2d 787 (E.D. Va. 2007)'' — the district court determined the relator failed to establish presentment of claims.. *''United States ex rel. Rory Mayberry v. Custer Battles, LLC, Case No. 1:06-cv-364 (E.D. Va. 2008)'' — the case was dismissed in its entirety. *''United States ex rel. DRC, Inc., et al. v. Custer Battles, LLC, et al., 562 F.3d 295 (4th Cir. 2009), Case No. 07-1220'' — the appellate court gave the plaintiffs the option of seeking a new trial.

In the media

Daylight Robbery: fleecing Iraq and the USA. BBC
Aired June 10, 2008.
Billions Wasted In Iraq? By Jennifer MacDonald/Ira Rosen, CBS Broadcasting
Aired February 12, 2006.
U.S. contractors in Iraq allege abuses: Four men say they witnessed brutality
By Lisa Myers and the NBC investigative unit.

NBC Nightly News ''NBC Nightly News'' (titled as ''NBC Nightly News with Tom Llamas'' for its weeknight broadcasts ) is the flagship daily evening News broadcasting#Television, television news program for NBC News, the news division of the NBC television network ...

. Aired February 17, 2005.
I'm From the Private Sector and I'm Here to Help
By Nancy Updike, This American Life. Aired June 4, 2004. An examination of the presence and motives of Custer Battles as a contractor in Iraq, including interviews with Hank Keirsey, a retired Army Lt. Colonel, a significant character in Absolutely American by David Lipsky.

References

{{reflist

External links

Custer Battles, LLC
viewed April 9, 2004 and defunct as of 2009. See also

Private military contractors in the Iraq War Private military contractors Security companies of the United States