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IRAQ'S CORRUPTION
العربية
Cases

Custer Battles LLC: False Claims Act liability over CPA currency-exchange contract (from 2003 to 2011)

Custer Battles LLC, a US security contractor founded by Scott Custer and Mike Battles, held CPA contracts including a 2003 contract to support Iraq's currency exchange (replacement of Saddam-era dinars) and Baghdad airport security. Whistleblowers (DRC Inc., Robert Isakson, William Baldwin) sued under the False Claims Act. A March 2006 jury verdict was set aside in August 2006 by Judge T.S. Ellis on the ground the CPA claims were not claims on the US; the Fourth Circuit reversed in part in April 2009, and after remand a $3m verdict was trebled with $198,000 in penalties, affirmed on 15 September 2011.

Period
From 2003 to September 2011
Sector
Reconstruction and donor fundsUS contractor fraud, CPA contracts
Kind of case
Civil case or arbitration
Jurisdiction
United States

How the money moved

Alleged inflated invoicing of the CPA (e.g., through affiliated shell companies and inflated equipment or lease costs) on cost-plus contracts paid with US Treasury and DFI money.

What happened

Civil liability (False Claims Act) affirmed in 2011. No criminal conviction is on record.

Open questions

  • Was the trebled judgment ever collected?
  • Did Iraqi authorities pursue DFI-funded overbilling separately?

People and companies

The table lists everyone this case names, with their legal status on the date shown. A status in this case does not carry over to any other case, and an accusation is not a conviction. How to read the status.
People and companies
NameRole in the caseLegal statusDetailAs of
Scott Custer
سكوت كستر
Co-founder, Custer Battles LLCFound liable (civil)Appealed the post-remand judgment pro se; judgment affirmed by the Fourth Circuit on 15 September 2011 (civil, not criminal).25 September 2026
Joseph Morris
جوزيف موريس
Defendant and appellant in the qui tam actionFound liable (civil)Appeal (No. 10-2215) rejected; judgment affirmed 15 September 2011.25 September 2026
Custer Battles LLC
شركة كستر باتلز
CPA contractorFound liable (civil)Found liable under the False Claims Act after remand; judgment affirmed 2011.25 September 2026
Michael (Mike) Battles
مايك باتلز
Co-founder, Custer Battles LLCNot charged as of the date of writingNamed co-founder; his individual liability in the final judgment is not on record.25 September 2026

Sources

These are the documents on which this case rests. Each quote is given in the language of the document.
  1. US Court of Appeals, Fourth Circuit10 April 2009Court judgmentTier A

    United States ex rel. DRC, Inc. v. Custer Battles, LLC, No. 07-1220, 562 F.3d 295

    After the jury found Custer Battles liable for fraud and returned a verdict of $3 million against it, the district court granted Custer Battles’ earlier-filed motion for judgment as a matter of law
    OriginalSHA-256 1481ed704868
  2. US Court of Appeals, Fourth Circuit (GovInfo)15 September 2011Court judgmentTier A

    US ex rel. DRC v. Custer Battles, Nos. 10-1033/10-1055/10-2215 (unpublished per curiam)

    We conclude that the jury’s verdict is supported by evidence presented at trial and that the court properly assessed damages, penalties, and relators’ statutory share.
    OriginalSHA-256 2a12c243c572
  3. NBC News / Associated Press18 August 2006Press reportTier D

    $10 million verdict overturned in fraud case

    A federal judge has overturned on a technicality a $10 million jury verdict
    Original
  4. Wikipedia25 September 2026Press reportTier D

    Custer Battles

    In March 2006, a jury ruled against Custer Battles, but the verdict was set aside by a District Court judge.
    Original

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