Securitas: Billed Hours and Waived Claims

In the Securitas settlement over guard services for the U.S. Army in Germany, Securitas GmbH Werkschutz paid the United States 6,529,042 euros, approximately $9.1 million at the time, over allegations that it billed for guard hours not actually worked. The German company’s contracts covered security at U.S. Army installations in Germany. If you know who worked the shifts and what the Army was billed, you may know where the service and the invoice part company.

The Contractor Asked the Army for More

Securitas had filed several actions against the Army in the Court of Federal Claims seeking additional compensation under one of the security contracts. The United States responded with fraud counterclaims, alleging that the overcharging violated the False Claims Act. The contractor’s demand for payment met the government’s demand to answer for allegedly false bills.

In the settlement the Justice Department announced on April 5, 2011, Securitas also agreed to dismiss claims against the Army totaling 4,449,658 euros, approximately $5.7 million. We see a striking reversal: the company went to court seeking more Army money and ended up paying the government while abandoning its own demands. The Army, meanwhile, alleged that it had already been charged for guards’ time it never received.

The Guard Hours Behind the Army’s Bill

The government’s allegation concerned the connection between work and billing: Securitas charged the Army for guard hours the government said were not worked. For an insider, that puts the staffing record and the payment request in the same story. Knowing who was present can explain something the invoice alone cannot. In a separate case, the government alleged that L-3 Communications calculated each person’s billed processing time using the earliest arrival or latest departure of anyone at the replacement center that day.

Time sheets, payroll and job codes can connect an employee’s work to a government charge. Read against the contract’s payment terms, those details let us examine how an absence on a shift could become an overcharge on an Army invoice. The useful comparison is between the hours claimed for the individual and the work that person actually performed.

Our work starts with that connection. If your concern is a guard shown as working who was actually absent, we examine how the claimed hours reached the government’s bill and what the people approving them knew. If you handled billing rather than staffing, your knowledge may begin with the figures submitted for payment and the instructions behind them. The point is to connect the operational account with the financial one.

Labor billing can misrepresent whether work happened, which contract it belonged to, or whether the worker met the billed qualifications. Those are different questions for the person inside the business. With the Securitas allegation, the question is whether the billed guard hours were worked. A payroll entry or job code matters here because of what it can tell us about the hours charged to the Army, rather than simply because it appears in the company’s accounting system.

The person familiar with the shift may understand a discrepancy that is invisible in a total. The person familiar with the invoice may understand how that discrepancy became a charge to taxpayers. Bringing those views together is how we assess evidence of defense contractor fraud with an insider, without expecting that person to know every part of the contract.

In its 2022 report Hidden Costs: US Private Military and Security Companies and the Risks of Corruption and Conflict, Transparency International Defence and Security recommends that prime contractors identify their subcontractors and itemize the value of subcontracted services when invoicing the government. That recommendation puts a practical question to the biller: whose service does this charge represent? For a guard-hours inquiry, we ask the same question about the people whose work the government paid for.

The report also describes understaffing and inadequate training among government personnel overseeing private military and security contractors. That helps explain why an insider’s account of the work can add something a government reviewer lacks. A reviewer sees the payment request; someone working the shift may know whether the people behind it were there. We bring that knowledge into the billing inquiry, where it can be tested against the hours claimed.

Who Investigated the Securitas Case

The Army Criminal Investigations Command and the Defense Criminal Investigative Service participated in the investigation. The Defense Contract Audit Agency and the German criminal police assisted them.

If you recognize hours being charged to the government that were never worked, we can assess a whistleblower case with you. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Your knowledge of the hours, the payment request and the decisions behind the charge gives us a concrete place to begin.

You Know Who Worked the Shift

If the guard hours billed to the Army differ from the staffing you know, speak to one of our Whistleblower Experts about the hours the Army paid for. We build the case with you and bring in defense contractor whistleblower lawyers who understand labor billing and overseas service contracts. We stay beside you the whole way, turning what you know about the shifts and the invoices into your strongest defense contractor whistleblower case.