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Xe Services (Blackwater) Procedural Challenge to Whistleblower Lawsuit Fails

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Judge T. S. Ellis, III denied Xe Services LLC’s motion to dismiss a whistleblower lawsuit, alleging the company defrauded the government by overcharging for its security services.  Xe Services, formerly known as Blackwater, came to notoriety for its controversial government contracts to supply private security in Iraq and Afghanistan.  Former employees Melan and Brad Davis, brought the allegations of fraud under the False Claims Act (FCA), seeking a reward of up to 30% of the funds recovered by the government.  Xe Services challenged the lawsuit under the theory that the amended FCA complaint must be sealed.  The court disagreed, holding that ordinarily FCA complaints – including amended complaints – must be sealed, but when the amended complaint is not substantially different from the original complaint and merely provides additional details, its unsealed filing does not “deprive the government of the opportunity to investigate [the] allegations and to decide whether to intervene.”  For more information about the False Claims Act or to report fraud, click here.

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