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Donald R. Warren, C.B. No. 138933Phillip E. Benson~ C.B. No. 97420Warren. Benson Law Group7825 Fay Ave., Suite 200La Jolla, CA 92037 .

Telephone: (858) 456-1900FacsImile: (858) 454-5878

Attorneys for Qui Tam Plaintiffs

UNITED STATES DISTRICT COURT

CENTRAL D IS TRI CT OF CALIFORNIA

WESTERN

UNITED STATES OF AMERICAWESLEY TODD THORPE ANDSALIM BENNETT,

Plaintiffs,

v.

HALLIBURTON COMPANY;KELLOGG BROWN & ROOT(aka KBR); and SERVICEEMPLOYEESINTERNATIONAL, INC.,

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Defen;dants

Qui Tam Plaintiffs Wesley Todd Thorpe ("Thorpe") and Salim

("Bennett") allege as follows:

I. Wesley Todd Thorpe ("1

behalf of the United States, bring,this

penalties under the False Claims Act,

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-.

Os,DIVISION-. wOi

CASE NO.-08924

))))))))))))))

COMPLAINT FOR VIOLATION OFTHE FEDERAL FALSE CLAIMSACT 31 V.S.C. §3729, et seq.

JURY DEMAND

LODGED UNDER SEALPURSUANT TO 31 V.S.C. §§3730(b)(2) and (3)]

Bennett

) and Salim Bennett ("Bennett"), on

to. recover treble damages and civil"V.S.C. §§ 3729 - 33.

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2. This action is based upon the defendants' knowingly submitting, or

causing to be submitted, false claims and knowingly using, or causing to be used,

false records or statements to get false claims paid, by systematically inflating

labor costs incurred on the Logistics Civil Augmentation Program (LOGCAP) III

contract in Iraq, Afghanistan and other countries supported by LOGCAP III.

II.

JURISDICTION AND VENUE

3. The Court has subject matter jurisdiction to entertain this action under

28 U.S.C. §§ 1331 and 1345. The Court may exercise personal jurisdiction over

the defendants pursuant to 31 U.S.C. § 3732(a).

4. Venue is proper in the Central District of California under 31 U.S.C.

§ 3732 and 28 U.S.C. §§ 1391(b) and (c) because the defendants reside and

transact business in this District.

III.

PARTIES

5. Qui Tam Plaintiff Wesley Todd Thorpe ("Thorpe") is a resident and

citizen of the United States. He currently resides in the State of North Carolina.

Thorpe was hired by HalliburtonIKBR in August 2005 as a plumber (Exhibit 2).

He was assigned to work in Iraq for KBR, in support of LOGCAP III, on August

23,2005, and assigned to Camp Speicher for approximately three weeks, Forward

Operating Base ("FOB") Remagen for approximately three weeks, and FOB

Brassfield Mora until December 15,2005. Prior to his employment with

Halliburton/KBR, Thorpe worked as a licensed plumber. Although hired by

Halliburton/KBR, Thorpe executed his employment contract with KBR subsidiary,

Service Employees International, Inc. ("SEll"). During his work in Iraq, Thorpe

was under the direction, policies and procedures of KBR. SEll served only as an

employment services company for Ha1liburton/KBR.

6. Qui Tam Plaintiff Salim Bennett is a resident and citizen of the

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United States. He currently resides in the State of Florida. Bennett was hired by

HalliburtonlKBR in August 2004 as a carpenter. He was assigned to work for

KBR at Kandahar Air Base in Afghanistan.in support of LOGCAP III where he

was located until he resigned in August 2005. Although originally hired as a

carpenter, Bennett became Administrative Specialist in charge of processing

timesheets. Like Thorpe, Bennett was hired by HalliburtonIKBR, executed his

employment contract with SEII, and worked under the direction, policies and

procedures of KBR. Prior to his employment with HalliburtonIKBR, Bennett

worked as a construction contractor for the Florida Department of Transportation.

7. Defendant Halliburton Company ("Halliburton") is a for-profit

corporation that provides products and services to the oil and gas industries. The

company employs more than 100,000 people in over 120 countries through its five

major operating groups, including KBR. Halliburton is based in Houston, Texas,

and does business throughout the United States, including in the Central District

of California..

8. Defendant Kellogg Brown & Root ("KBR") is Halliburton's

engineering and construction division subsidiary. KBR is divided into two

distinct divisions: the Energy & Chemicals Division and the Government &

Infrastructure Division. The Government & Infrastructure Division provides a

broad range of services to the military and civilian branches of governments

around the world. KBR is also based in Houston, Texas, and does business

throughout the United States, including in the Central District of California.

9. Defendant Service Employees International, Inc. ("SEII") is a wholly-

owned subsidiary of KBR that provides employee and paYroll services for KBR.

SEll is a foreign entity, incorporated in the Cayman Islands with its principal place

of business in Dubai, United Arab Emirates.

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Qui Tam Plaintiffs' Complaint

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1 IV.

2 GENERAL ALLEGATIONSA. The LOGCAP Contract

3411 10. Since the early 1990s, the Department of Defense ("000") has used

logistics support contracts to meet many of its logistical support needs during5

combat operations, peacekeeping missions, and humanitarian assistance missions.6

More recently, these contracts have supported contingency operations such as7

Operation Enduring Freedom and Operation Iraqi Freedom as a major part of8

America's Global War on Terrorism. Simply put, such contracts are the DOD's9 reliance on civilian contractors to provide supplies and services to the military.

10 11. In 1992,000 created the Logistics Civil Augmentation Program

11 (LOGCAP) contract as an umbrella support contract to provide all the support

12 services necessary in a conflict. The Army awarded the first LOGCAP contract

13 (LOGCAP I) in 1992 to KBR. Support services were provided under LOGCAP I

14 to contingency operations in Haiti, Somalia and the Balkans. In 1997, LOGCAP

15 (LOGCAP II) was awarded to DynCorp Services to continue services in the

16 Balkans. In 2001, LOGCAP III was awarded to KBR that, today, supports

17 contingency operations in Iraq, Kuwait, Afghanistan, Djibouti, Republic of

18 Georgia, and Uzbekistan. The LOGCAP III contract is a cost-plus award fee

19 contract. Under LOGCAP III, Task Orders are issued with specific Statements of

20 Work for designated areas. The LOGCAP III contract guarantees the contractor

21 40 hours per week for each worker working on the LOGCAP III services. Any

22 hours worked over 40 hours per week are paid by the United States on a straight

23 time rate and must be backed up by supporting documentation.

24 12. In December 2001, LOGCAP III, contract DAAA09-02-D-OOO7, was

25 awarded to KBR that included service support to U.S. Military and Multi-National

26 Force bases in Iraq and Afghanistan. In April 2005, Task Order 89 was issued to

27 KBR, for specific services, as outlined in the Statement of Work, at various

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Qui Taf!l Plaintiffs' Complaint"'., '..'

.;'" <",!, ..'.:."".' '.

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government. O&M includes, but is not limited to, structures/facilities used as

living and office and work space, water and sewer, and electrical components

In order to perform this service, KBR, through SEll,

11 False Claims Made

13. From approximately December 2001 to present, defendants defrauded

the DOD by systematically inflating, and causing to be inflated, labor costs

incurred on the LOGCAP III contract in Iraq, Afghanistan and other countries

KBR routinely instructed the LOGCAP III

7 days per week, on

It is

They also have inflated labor costs by duplicating work orders for the same job

It is alleged the

14. KBR's timekeeping policy and timesheet and work hours guidelines

Contract mandates a goal of 84 hours to be charged by their

In addition, managers and supervisors, as a management

Included in the Statement of Work is the requirement that KBR

tricians and other construction

employment contract, were

alary. All hours

time rate.

Employees, as part of their

In addition, HalliburtonJKBR has systematically inflated

employees necessary to perfonn the services under the contract.

III

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corporate 84 hour work week mandate. KBR's timekeeping policy covers SEll

employees assigned to LOGCAP III. The KBR policy does not require any

explanation by the employee for hours charged up to 12 hours per day or 84 hours

per week. Conversely, the employees are required to submit a written explanation

for their fail to turn in time sheets totaling 12 hours per day.

15. Shortly after being hired by Halliburton/KBR, Qui Tam Plaintiff

Thorpe was sent to Iraq as a plumber to work on DOD Contract DAAA09-02-

DOO07, Task Order 89. He arrived in Iraq on August 23,2005 and was first

assigned to Camp Speicher. Within two days, he, along with 30 to 40 other new

employees, attended an in-processing meeting presided over by a KBR Human

Resources representative. The HR representative instructed the employees to log

12 hours of work per day, seven days a week, on their time sheets for a total of 84

hours per week and they must provide a written explanation if their time sheets

failed to show 12 hours per day. Compensation on the employees' employment

contracts guaranteed payment for 40 hours per week and that all hours worked

over 40 hours per week would be paid at a straight time rate.

16. Thorpe was assigned to Camp Speicher for approximately three

weeks as a plumber. It is estimated KBR had 2000 employees assigned to

Speicher. From conversations Thorpe had with many of his co-workers, every

employee at Speicher was charging 12 hours per day on their time sheets even

though they actually only worked 2 or 3 hours per day. The KBR time sheet is

titled "Government Operations Weekly Timesheet." It is always pre-printed withthe "Attendance Code" of "0601 II - the charge code for "Regular Work." When

not working, the employees were not on a standby status. "Standby" hours would

be coded "0617." The standby code was never printed on the time sheet. Hours

on the time sheet were filled in on a daily basis by each employee and were kept in

a box at a central location. Thorpe, and the other employees, were paid for the

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Qui Tam Plaintiffs' Complaint

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total 12 hours per day, but 12 hours were never worked. Work was only done by

work order. The \'lork order was called "Service Work Order" and issued by KBR

supervisors. Each work order would describe the job to be done and was signed

by the employee when the work was completed. No work was done unless a work

order was issued.

17. After three weeks at Camp Speicher, Relator was assigned to FOB

Remagen. KBR supervisors at Remagen reinforced the need to charge 12 hours

per day on the timesheets. It is estimated KBR had 165 employees assigned to the

FOB. Every employee charged 12 hours per day on their timesbeets even though

actual work nom1ally did not exceed 1 hour a day.

18. After approximately three weeks at FOB Remagen, Thorpe was re-

assigned to FOB Brassfield-Mora. Thorpe remained at Brassfield-Mora until

December 16,2005, "vhen he returned to the United States. As occurred at the

other sites, KBR supervisors at Brassfield-Mora emphasized that each employee

charge 12 hours per day 011 their timesheets. It is estimated KBR had 15

employees assigned to that location. During the time he was assigned to

Brassfield-Mora, there was never enough work to justify 12 hours a day for each

worker. Thorpe estimates each worker actually worked approximately 2 hours per

day. The rest of the day was usually taken up with sleeping, eating, watching

movies, or just sitting around waiting for a work order.

19. Thorpe found, through conversations with other KBR workers in

various parts of Iraq, that the requirement of charging 12 hours per day has been

standard operating procedure since KBR has operated in Iraq.

20. Qui Tarn Plaintiff Bennett was hired by HalliburtonlKBR as a

carpenter to work on DAAAO9-02-DOOO7. After spending approximately a

month in Uzbekistan, Belmett arrived in Afghanistan in September 2004 and was

assigned to the Utilities Department at Kandahar Air Base. The Utilities

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Qui Tam Plaintiffs' Complaint

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Department was responsible for the maintenance of the base. Shortly after his

arrival at Kandahar~ Bennett was told by his supervisors that he was to charge 12

hours a day on his timesheets. He eventually learned that managers make up the

Target Work Week Schedule~ usually a week in advance~ with 12 hours listed for

each employee in order to meet the 84 hour per week requirement. As a result, all

employees are shown as "on the clock" for the 12 hours daily even if they just sit

around with no work to do. They then have to charge 12 hours daily on their

time sheets to meet the Schedule requirements. Although Bennett was supposed to

work as a carpenter, his job changed from labor to administrative duties because of

his computer knowledge. Those duties included processing time sheets and work

orders. In approximately December 2004, Bennett's duties formally changed to

Administrative Specialist. As Administrative Specialist, Bennett was in charge of

processing and keeping track of time sheets, work orders and daily work log sheets

for the Utilities Department that included anywhere from 150 to 300 workers. He

remained in that position until his resignation and return to the United States in

August 2005.

21. Bennett became aware that there was not enough work for every

employee to charge 12 hours per day. He estimates that employees worked less

than 8 hours a day. It was common for employees to just sit around waiting for

work, but KBR required that they be shown as "on the clock" 12 hours every day,

and submit 12 hours on their timesheets. It is estimated KBR had 1,500 to 2,000

employees assigned to Kandahar Air Base. All work was conducted from work

orders issued by KBR management. Employees were also supposed to maintain a

daily work log sheet that recorded all activity whether work or not.

22. While performing his duties processing time sheets and work orders,

Bennett noticed time sheets were not matching up to work orders or the daily logs.

Using his computer skills, Bennett created a tracking database incorporating data

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Qui Tam Plaintiffs' Complaint

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did have the skill, but each of the employees would charge for the job. It was

discovered that five employees, being paid $75,000 a year, were supposedly doing

the same job processing work orders and that it was a KBR management decision

to do that. Bennett notified his supervisors of the inflated timesheets, but nothing

was done to correct the problem. Bennett eventually learned that inflating hours

on the timesheets has been a long standing practice of KBR that goes back to

LOGCAP I in the Balkans. He observed time sheets being charged time for such

things as shopping at the village marketplace, eating, and haircuts.

23. Based on their experiences and observations with Halliburton/KBR,

Qui Tam Plaintiffs are informed and believe the company knowingly inflated labor

costs by:

a. Inflating hours worked on time sheets on a daily basis to reflect 84

hours a week that management required of every employee in order to meet

corporate mandated goals.

b. Inflating cost estimates to the government required to complete

required services by inflating the nwnber of employees and hours it would

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from timesheets, work orders, and daily logs in order to analyze time charging

patterns. Bennett found from his analysis that hours charged on timesheets by

KBR employees were always inflated. He estimates that, for the Utilities

Department alone, time sheets were inflated by more than 100 hours per day. In

addition, Bennett discovered that many work orders were being duplicated many

times over for the same job. The duplicated work orders were always issued with

different numbers, but would describe the same job thus inflating work hours8

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perfonned on that job. From his observations, Bennett estimates that 60-70% of

work orders were fraudulent. Further, KBR hired many employees who did not

have the skills to perfonn the job for which they were hired. The result was that

multiple employees would often work on the same work order with someone who

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Qui Tam Plaintiffs' Complaint

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e. Based on KBR's timekeeping policy for LOGCAP III and

conversations with other KBR workers, KBRs practice of inflating labor

costs extends to Kuwait, Djibouti, Republic of Georgia, and Uzbekistan.

v.

FIRST CAUSE OF ACTION

(Violation of the Federal False Claims Act - 31 U.S.C. §§ 3729, et seq.)

(Against All Defendants)

24. Qui Tam Plaintiffs hereby refer to and incorporate by this reference

each and every allegation set forth in paragraphs 1 through 23, inclusive.

21. By their conduct above, from 2001 and continuing, defendants

knowingly submitted, or caused to be submitted, false claims for payment to the

United States, as set forth above, in violation of31 U.S.C. § 3729(a)(1).

Additionally, defendants knowingly made or used false records or statements to

get false or fraudulent claims paid by the United States, in violation of31 V.S.C. §

3729(a)(2).22. As a result of such violations of the False Claims Act, Defendants

have caused wrongful payments to be made from the United States Treasury. All

of this has resulted in damage to the United States in the millions of dollars.

VI.

PRAYER FOR RELIEF

WHEREFORE, qui tam plaintiffs pray for relief as follows:

1. F or three times the dollar amount shown to have been wrongfully

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HalliburtonIKBR systematically submitted billings to the DOD

Qui Tam Plaintiffs' Complaint

'..' '. .

charged and paid by the United States;

2. F or maximum civil penalties for all false records, statements,

certifications and claims submitted to the United States, subject to being consistent

with the Excessive Fines and Penalties Clause of the Eighth Amendment to United

States Constitution;

3. For the maximum statutory qui tam share of the recovery obtained for

the United States;

4. For all other damages allowed under law, including litigation

expenses and reasonable attorneys' fees; and

5. For such other and further relief as the court deems just and proper.

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12 JURY DEMAND

13 Qui Tam Plaintiffs hereby demands trial by jury.

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15 Dated: December 22,2005 Respectfully submitted,

16 Warren. Benson Law Group

17 " ~ /I

18 ~ ~.W.,..-Donald R. Warren

19 Attorney for Qui Tam Plaintiffs

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Qui Tam Plaintiffs' Complaint