A settlement has been reached in a whistleblower class action lawsuit brought against APTx Vehicle Systems Limited, Alchemie Grp Ltd, and Haslen Back, the director and shareholder of Alchemie. They are accused of wire fraud conspiracy.
In relation to the criminal charges, British contractor APTx Vehicle Systems Limited agreed to plead guilty to conspiracy to defraud the United States, the Coalition Provisional Authority that governed Iraq from April 2003 to June 2004, the government of Iraq and JP Morgan Chase Bank. In relation to the civil charges, APTx, Alchemie and Haslen Back, agreed to pay $2 million to the United States to resolve False Claims Act violations. The whistleblower will receive $540,000 as its share of the settlement amount.
According to the criminal information, APTx engaged in a fraudulent scheme involving an August 2004 contract valued at over $8.4 million for the procurement of 51 vehicles for the Iraqi Police Authority. The contract was initially awarded to a different, “prime” contractor, which in turn subcontracted the procurement to APTx for over $5.7 million. Payment under the contract was by letters of credit issued by JP Morgan Bank.
The criminal information further charges that in May and June 2005, APTx submitted shipping documents to JP Morgan to draw down on the letters of credit, which falsely and fraudulently asserted that all 51 vehicles were produced and ready to ship to Iraq. In fact, as APTx knew, none of the vehicles had been built, none of the vehicles were legally owned or held by APTx and none of the vehicles were in the process of transport to Iraq. The fraudulent shipping documents also listed a company as the freight carrier that APTx knew was not a shipping company and named a fictitious company as the freight forwarder.
