Blackwater charged U.S. government for prostitute and strippers, ex-employees allege

Unsealed court documents from a pending lawsuit allege that the security firm Blackwater Worldwide defrauded the federal government for various expenses, including the cost of an on-staff prostitute, strippers, alcohol, false and double billings, among other things. Blackwater Worldwide changed its name to Xe Services shortly after the shooting of 17 Iraqi civilians in September of 2007.

The lawsuit was filed by a married couple by the name of Brad and Melan Davis who both had previously worked for the company at one time. The New York Times reported that Melan Davis, who did bookkeeping for the company stated that when she questioned the fraudulent expenses, she was fired in February 2008 for the inquiry. Her husband Brad Davis, who worked in security, left the company voluntarily.

The lawsuit accuses Blackwater of hiring a prostitute for male Blackwater employees in Kabul, Afghanistan, and billing her salary and travel expenses under a “Morale Welfare Recreation” expense category.

Also, travel was allegedly billed to the United States government without any documentation. Ms. Davis stated that while on a trip for the company in Amman, Jordan, the company had her and two other employees create, as reported in The Washington Post, “reams of false invoices at inflated rates so that her Blackwater bosses could overcharge the government for the travel.”

Davis’ lawsuit also claims that Blackwater doubled billed air travel between the United States and Amman, using a subsidiary company named Greystone, Limited. Amman was the company’s hub location for the transport of its employees to and from Iraq.

In addition, according to the Associated Press, the lawsuit charges that during the aftermath of Hurricane Katrina in Louisiana, Blackwater workers charged payments made to strippers under a “cleaning services” charge, and billed the government accordingly.

The lawsuit falls under the False Claims Act. With this law, whistleblowers can collect a percentage of the money recovered in cases where companies are found guilty of defrauding the government.

Xe Services has not publicly responded to the lawsuit.