DynCorp to Settle Claims of Inflating Costs for Iraq Work for $7.7 Million

DynCorp International Inc., the largest U.S. contractor in Afghanistan, agreed to pay $7.7 million to resolve allegations it submitted inflated claims for construction work in Iraq, the U.S. said.

The Justice Department said yesterday that DynCorp and its subcontractor, The Sandi Group, will settle a whistleblower case filed in federal court in Washington. The Sandi Group, accused of submitting false claims on a police-training contract in Iraq, will pay more than $1 million.

“The hard work of stabilizing Iraq is challenging enough without contractors and subcontractors inflating the cost of rebuilding by making false claims at taxpayers’ expense,” Assistant Attorney General Tony West, who oversees the department’s civil division, said in an e-mailed statement.

DynCorp inflated the costs of building camps at various locations in Iraq, the U.S. said. The Sandi Group sought reimbursement for “danger pay” that it falsely claimed was paid to employees.

The lawsuit, which couldn’t be verified on the court’s docket, was filed by two former employees of The Sandi Group. Those former employees, Drew Halldorson and Brian Evancho, will receive as much as $481,710, according to the Justice Department.

DynCorp “cooperated fully with the review of the issues and is pleased to have reached a resolution,” said Ashley Burke, a spokeswoman for the Falls Church, Virginia-based company, in an e-mailed statement.

“The settlement agreement expressly states that DI does not admit any wrongdoing,” Burke said. “While the company believes that its actions were appropriate and allowable under the contract, we are committed to resolving this issue to the satisfaction of the U.S. government.”

Russell Hugo, executive vice president of Washington-based The Sandi Group, didn’t return a phone message seeking comment.

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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