2011 OCT 12 P 2: 31

Transcription

2011 OCT 12 P 2: 31

Case 1:11-cv-01104-TSE-TRJ Document 1 Filed 10/12/11 Page 1 of 53 PageID# 1
FILED
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
2011 OCT 12 P 2: 31
ALEXANDRIA DIVISION
CLERK US D!373iCT COURT
ALEXANDRIA. VIRGINIA
UNITED STATES OF AMERICA, Plaintiff,
Qui Tarn Complaint
ex rel.
Filed under seal pursuant to 31 U.S.C.
§ 3730(b)(2)
DUANE P. DIETER, Relator,
LINXX GLOBAL SOLUTIONS, INC. and
FRANCIS CUCCI,
Defendants.
FALSE CLAIMS COMPLAINT
Relator Duane P. Dieter brings this qui lam action in the name of the United States of
America, by and through his undersigned attorneys, and alleges as follows:
Introduction
1.
This is an action to recover damages and civil penalties on behalf of the United
States of America brought by Relator Duane P. Dieter ("Relator" or "Dieter") and arising from
false statements and claims made and presented by the Defendants, Linxx Global Solutions, Inc.
("Linxx"), and Francis Cucci ("Cucci"), owner of Linxx, and/or their agents, employees, and co
conspirators, in violation of the Federal Civil False Claims Act, 31 U.S.C. §§ 3729 etseq (the
"FCA"). The violations involve claims the Defendants made for payment for combat training
courses provided to the United States Department of Navy ("Navy") SEAL Teams since at least
2003, which claims Defendants knew were false, exaggerated, and/or ineligible.
2.
The FCA provides that any person who knowingly submits or causes to be
submitted a false or fraudulent claim to the Government for payment or approval is liable for a
civil penalty of up to $11,000.00 for each such claim submitted or paid, plus three times the
amount of the damages sustained by the Government. Liability attaches when a defendant
knowingly seeks payment from the Government that is unwarranted. The FCA allows any
person having information regarding a false or fraudulent claim against the Government to bring
an action for himself and for the Government and to share in any recovery. The complaint is
filed under seal for 60 days, without service on the defendants during that period, to enable the
Government: (a) to conduct its own investigation without the defendants' knowledge; and (b) to
determine whether to join the action.
3.
Based upon these provisions, Relator seeks to recover damages and civil penalties
arising from Defendants' presentation of false records, claims, bills, invoices, and/or statements
to the United States Government and its agents in connection with Defendants' claims for
reimbursement for combat training courses provided to the Navy SEAL Teams.
Overview of Action
4.
At bottom, this action arises from an abuse of power by a select few within the
Navy SEAL Teams which financially benefitted the Defendants. It is not an indictment of the
SEALs themselves, which are a highly patriotic, unique, well-trained team of warriors constantly
deployed throughout the world to protect our national interests via offensive strikes against
enemy targets and surveillance and reconnaissance operations. They perform these duties to
serve their country and the American people, and to protect the American way of life - and have
done so with impeccable character and integrity whenever duty has called. Indeed, SEALs abide
by anoble ethos: each SEAL accepts the hazards ofhis chosen profession and places the welfare
and security of others before his own.
5.
In this case, however, one SEAL Team officer - Timothy Szymanski,
Commodore ofNaval Special Warfare ("NSW") Group 2- has failed to abide by the SEAL
ethos. Szymanski has placed his personal interests above the welfare and security ofothers by
using his position within the SEALs to influence the type of combat training the SEAL Teams
receive. In doing so, Szymanski has compromised the quality ofthe SEAL Teams' training and
the integrity ofthe SEAL Teams' missions, and has put at risk the lives of SEALs through the
use of dangerous techniques not applicable to actual combat situations.
6.
Szymanski has conspired, and continues to conspire, with Defendants Linxx and
Cucci by using his position within the SEALs to act on behalf ofLinxx and Cucci; specifically,
by (1) duping the Government into believing that mixed martial arts ("MMA") based combatives
training provided by Linxx and Cucci meets the Government's requirements for operational
combative training, when in fact Linxx's MMA-based combatives training does not meet these
requirements; and (2) directing government contracts for SEAL Team training to Linxx, despite
knowledge that Linxx provides only MMA-based combatives training, and therefore cannot
provide the operational training for which the Government contracted.
7.
As a result ofthis conspiracy, in or about 2003 Linxx began teaching courses at
the Naval Special Warfare Development Group ("SEAL Team Six" or"NSWDG") at their
facility located in Dam Neck, Virginia; in or about 2005, Linxx began teaching courses to NSW
Group 2, which includes SEAL Teams Two, Four, Eight, and Ten; in orabout October 2006,
Linxx was awarded acontract to conduct combatives training with NSW; in or about May 2008,
Linxx was awarded a Combatives Training Services contract with Naval Special Supply Systems
Command; in or about 2008 or 2009, Linxx was awarded a sole source contract under
Solicitation Number H92240-08-T-TR07 to train NSW Group 1, which includes SEAL Teams
One, Three, Five, and Seven; on or about September 17,2009, Linxx was awarded a contract for
Expeditionary Training Command High Threat Instructor Training; on or about October 20,
2009, Linxx was awarded a USSOCOM training contract for a four-week, small craft, combating
terrorism mobile training team course designed to educate senior leadership; and, on or about
January 8,2010, Linxx was awarded a contract with Naval Beach group personnel for a ten-day
defensive combat operations training course. In addition to the contracts identified herein, from
2005 to date, over $30 million has been awarded to Linxx has through numerous other purchase
and delivery orders. See http://www.usaspending.gov/search?query=&searchtype=&form
Fields=eyJTZWFyY2hUZXJtIjpbImxpbnh4Il 19.
8.
At no time, however, did Linxx or Cucci disclose to the Government that Cucci
maintains a close personal relationship with Szymanski. The close relationship between
Szymanski and Cucci has resulted in the Government being deceived into purchasing Linxx's
services despite the failure of such services to meet the Government's requirements. Linxx's and
Cucci's failure to disclose Cucci's close personal relationship with Szymanski constitutes an
improper organizational conflict of interest ("OCI"). Moreover, Szymanski's relationship with
Cucci constitutes a personal conflict of interest ("PCI"). Linxx and Cucci were aware of
Szymanski's OCI and PCI and failed to disclose the OCI and PCI to the Government.
9.
As a result of its contracts with SEAL Team Six, NSW Group 2, NSW Group 1,
and various other Navy divisions, Linxx submitted and/or caused to be submitted to the United
States false and/or fraudulent records, claims, bills, invoices, and/or statements. These records,
claims, bills, invoices, and/or statements were false and/or fraudulent under the theories of
fraudulent inducement and implied certification.
10.
First, the records, claims, bills, invoices, and/or statements falsely and/or
fraudulently induced the Government into awarding contracts to Linxx for MMA-based
combatives training, which training Szymanski, Linxx, and Cucci duped the Government into
believing met the Government's requirement for operational training. MMA is not operational.
Thus, the records, claims, bills, invoices, and/or statements falsely and/or fraudulently stated that
Linxx was providing the operational combative training for which the Government intended to
contract, when in fact it was not doing so, and had no intention of doing so, because it provided
only non-operational MMA training.
11.
Second, by submitting bids for contracts with the SEAL Teams and other Navy
divisions in which it failed to disclose Cucci's close personal relationship with Szymanski, Linxx
falsely certified that it had no OCIs affecting its performance of the contracts, when in fact it did
have such an OCI.
12.
Finally, Linxx and Cucci were aware of and benefitted from Szymanski's PCI
because Linxx received contract awards for its MMA-based combatives training. However,
Linxx and Cucci failed to disclose this PCI to the Goverment. By submitting bids for contracts
with the SEAL Teams and other Navy divisions in which it failed to disclose Cucci's close
personal relationship with Szymanski, Linxx falsely certified that no PCIs affected its
performance of the contracts, when in fact it did have such a PCI.
13.
The conspiracy between Szymanski, Cucci, and Linxx to affect the SEAL Teams'
training, and the resulting claims for payment made by Linxx, corrupt the integrity of the
procurement system. Further, Linxx's and Cucci's actions have resulted in unfair competition, to
the detriment of other vendors.
14.
The United States is unaware of the falsity of the records, claims, bills, invoices,
and/or statements made by Linxx and has paid, and continues to pay, Linxx for claims that would
not be paid if the truth were known. Because the United States would not pay Linxx's claims if
the truth were known, Linxx's false certifications were material to the Government's decision to
pay Linxx. Linxx's actions have caused and continue to cause material harm to the Government.
The Parties and Principal Actors
15.
Relator Duane P. Dieter is a citizen of the State of Maryland. Dieter owns Close
Quarters Defense, a company specializing in military and police special operations training.
Close Quarters Defense teaches Dieter's proprietary and trade secret-protected system, Close
Quarters Defense ("CQD"). Relator has personal knowledge of the false records, claims, bills,
invoices, and/or statements presented to the Government by and for the Defendants named
herein.
16.
Defendant Linxx is a Virginia company doing business in the Commonwealth of
Virginia under contracts to train SEAL Team Six and NSW Group 2. Linxx also does or has
done business in the State of California under Solicitation No. H92240-08-T-TR07 between the
Navy, NSW Group 1, and Linxx for Combat Course Development and Training for personnel
assigned to the Assaults Division of the NSW Group One Training Detachment, San Diego,
California, 92155. Linxx is owned and operated by Defendant Cucci.
17.
Defendant Francis Cucci is a citizen of the Commonwealth of Virginia. Cucci is
a former Navy SEAL and served on the SEAL Team Six Blue Team at Dam Neck. He left the
SEALs in 1994 to pursue a career in martial arts.
After leaving the SEALs, in or about 1995, Cucci's martial arts academy was awarded a
contract to provide morning physical training exercises to the SEAL Team Six Gold Team1 at
Dam Neck. The classes were poorly attended, however, so Cucci stopped teaching. Because
Cucci already had been paid under the contract, in 1995, CAPT O'Connell banned Cucci from
Dam Neck for breach of contract and for accepting payment without providing services.
Cucci is known to promote his MMA courses by reference to his tenure with SEAL Team
Six and his role as a trainer for the SEALs. For example, in 1995, Cucci released a video called
"SEAL Team Unarmed Combat Course." Advertisements for the video claimed it was "the
official 'SEAL Team Unarmed Combat Course,'" and that Cucci, "[h]imself a former member of
the legendary SEAL Team Six,... has recently decided - for reasons of guaranteeing public
safety - to reveal to the U.S. civilian population the highly-effective hand-to-hand fighting
system that (until now) he has taught exclusively to the Navy SEALs!" Similarly, in an
advertisement for a second video that promises to "take[] you beyond what he taught you in 'The
Navy SEAL Unarmed Combat Course' video," Cucci trades on his status as a former SEAL and
urges patrons to purchase the video because "[k]nife attacks are increasing at an alarming rate.
Criminal scumbags on the street have figured out that it's much better to use a knife than a gun.
You see, knives are quiet. They're easier to conceal. They don't cost as much. And they're
actually five to ten times deadlier than guns Oust ask O.J.!)"
Cucci is known to keep close friends. According to a 1995 interview of Cucci published
in Full Contact magazine, Cucci "typifies the close-knit camaraderie found in Special Operations
units the world over. In Hawaii, there is a word - ohana - which describes a larger extended
1SEAL Team Six is comprised of smaller teams of SEALs identified by color, e.g., Gold Team
or Blue Team.
family which you treat as your own. Frank exemplifies this concept where his close friends are
concerned."
18.
Szymanski is a close personal friend of Cucci's. Szymanski and Cucci
simultaneously served on the SEAL Team Six Blue Team in the early 1990s. Szymanski
currently serves as Commodore of NSW Group 2.
Prior to serving as Commodore of NSW Group 2, Szymanski held various positions with
the SEALs; however, much of his time was spent at Dam Neck with SEAL Team Six. For
example, between 1992 and 1997, Szymanski served as a member of the SEAL Team Six Blue
Team at Dam Neck. From 2000 to 2002, Szymanski served as Operations Officer of SEAL
Team Six. From 2007 to 2008, Szymanski served as Deputy Commander of SEAL Team Six.
As a result of his tenure on SEAL Team Six at Dam Neck, Szymanski is understood by
other SEALs to lead the "Dam Neck Mafia." The Dam Neck Mafia is a powerful group of
SEALs generally understood to control the combatives training, shooting schools, or other
training programs SEAL Team Six patronizes, and to suggest to contracting officers the
combatives training, shooting schools, or other training programs for which the SEALs should
contract. Because of his leadership role in the Dam Neck Mafia, the SEALs often refer to
Szymanski as "the Queen Bee."
19.
The principle connections between Cucci and Szymanski include, among other
things:
•
In the early 1990s, Cucci and Szymanski simultaneously served on the SEAL
Team Six Blue Team at Dam Neck.
•
Former East Coast CQD course manager Eric Deming informed Relator that
Szymanski trains at Linxx when he is off duty.
•
In 1996, Cucci promoted a televised MMA fight in which Szymanski was
scheduled to battle Dale Comstock, a member of the Army's special operations
team.
•
In 2005, Relator approached CAPT Pete Van Hoosier and told Van Hoosier he
intended to speak with Szymanski about why the SEALs should continue with
CQD training, and why the SEALs should not contract for Linxx's MMA-based
combatives training. Van Hoosier told Relator, "Don't waste your time.
Szymanski is going to do what he wants to do." Nevertheless, Relator
approached Szymanski. When Relator approached Szymanski, Szymanski
informed Relator that he was "getting Cucci in there" to train the SEALs.
Relator responded, "If you believe Cucci is best for the operators and their
survivability." Szymanski replied, "It doesn't matter, that's what I'm doing."
•
In 2006 or 2007, an internal Navy document referred to Szymanski as a point of
contact for Linxx's MMA-based combatives training courses. In an NSW Group
2 slideshow presentation called "Weekly Combatives Course." NSW Group 2
informed the SEAL Teams of the state of combatives and self-defense training at
NSW Group 2. One slide indicates that Szymanski reported that Linxx courses
were well-attended by NSW Group 2 SEALs. The slide states that "[t]he
temporary MWR [Morale Welfare Recreation] sponsored Linxx Jiu Jitsu
program at Rockwell Hall received consistent and positive NSW representation
(CDR Szymanski)."
•
In 2007, Szymanski served as Deputy Commander of SEAL Team Six. In this
role, Szymanski made Linxx's MMA-based combatives training mandatory at
Dam Neck. He did so by telling the SEAL Team Six Assault Team Master
Chiefs to inform their personnel that Linxx's MMA-based combatives training
was mandatory for all SEALs. Szymanski made such training mandatory for the
SEALs because until that time, Linxx courses had not been well-attended, and
Szymanski sought to encourage attendance.
•
In 2007, a Captain at Dam Neck communicated to Jim Hintzke that if Relator
and/or CQD endorsed an MMA-based combatives training program, Relator
would be permitted to teach a two-week CQD course to SEAL Team Six at Dam
Neck. Hintzke relayed this message to CQD course manager Eric Deming. In
the fall of 2007, because others had been deployed, Szymanski was the only
Captain at Dam Neck. Moreover, Linxx was the only vendor teaching MMAbased combatives courses at Dam Neck. Therefore, Deming knew that
Szymanski wished for Relator and/or CQD to endorse Linxx. Deming relayed
this information to Relator.
•
In 2008, Szymanski and SEAL Master Chief Dave Cooper co-authored the
NSWDG section of a report entitled, Outside Federal Agencies Deficiencies
Report (the "Deficiencies Report"). The Deficiencies Report claimed that MMAbased combatives training had operational relevance to the SEAL Teams'
missions, and in particular, SEAL Team Six's missions, and advocated future
contracts for MMA-based combatives training rather than CQD. The
Deficiencies Report was distributed to third parties trained by CQD with the
intent to discourage the use of CQD and to encourage use of MMA-based
training. SOCS Boychuk informed Relator that, as a result of issuance of the
Deficiencies Report, many SEALs believed that Linxx would fulfill requirements
to teach MMA-based combatives training courses to the SEAL Teams.
SOC Mike Brunst is a SEAL. Brunst was stationed at Dam Neck with SEAL
Team Six in 2007, and therefore reported to Szymanski while Szymanski served
as the Deputy Commander of Dam Neck. Brunst trains at Linxx and teaches
Linxx's MMA-based combatives training courses to the SEALs at NSW. In
2008, Brunst authored a portion of the Deficiencies Report, which disparaged
CQD, thereby favoring Linxx.
•
In addition to Brunst, approximately ten SEALs who reported directly to
Szymanski also serve as Linxx instructors. Specifically, SOCS James Boychuk
relayed to Relator that CQD has had trouble at Dam Neck and in NSW Group 2
because "there are at least 10 SEALs who work for Linxx."
•
For example, Steve Raynor is a SEAL. Raynor is a Linxx instructor, and has
been since 1995. Raynor is identified on the Linxx Academy of Martial Arts
website as a Linxx instructor.
•
In 2009, Laura Larkin served as a civilian attorney with the Navy. Larkin
advised the Navy regarding all legal issues relating to CQD, Dieter, and NSW;
for example, Larkin responded on behalf of NSW to CQD's bid protest. Larkin's
husband, Joe Larkin, served on the SEAL Team Six Blue Team at Dam Neck and
reported to Szymanski.
20.
Former LCDR John "Jocko" Willink served as the Officer in Charge of NSW
Group 1 Training Detachment ("TRADET") until his discharge from the Navy in 2010. As
Officer in Charge, Willink had the ability to mandate training for Group 1 SEALs, including
combatives training. In that capacity, Willink promoted MMA-based combatives training.
Relator alleges that Willink promoted MMA-based combatives training with the intent that the
SEALs contract for MMA-based combatives training taught by Linxx. Accordingly, Relator
alleges that Willink acted as an agent of, or on behalf of, Linxx.
10
Jurisdiction and Venue
21.
This Court has jurisdiction over the subject matter of this action under 28 U.S.C.
§ 1331 and 31 U.S.C. § 3732(a), which specifically confers jurisdiction on this Court for actions
brought pursuant to 31 U.S.C. § 3730.
22.
This Court has personal jurisdiction over Defendants pursuant to 31 U.S.C.
§ 3732(a), which provides that "[a]ny action under section 3730 may be brought in any judicial
district in which the defendant, or in the case of multiple defendants, any one defendant can be
found, resides, transacts business or in which any act proscribed by section 3729 occurred."
Defendant Linxx resides in this District at 272 Bendix Road, Suite 220, Virginia Beach, Virginia,
23452; and its registered agent has offices at 150 W. Main Street, Suite 1600, Norfolk, Virginia
23510. Cucci resides in this District. Furthermore, during the relevant time period, Defendants
Linxx and Cucci transacted business in the Eastern District of Virginia because they have trained
and continue to train SEAL Team Six SEALs in Dam Neck, Virginia, and NSW Group 2 SEALs
in Little Creek, Virginia.
23.
Venue lies in this District pursuant to 31 U.S.C. § 3732(a) because Defendants
Linxx and Cucci can be found in, reside in, and/or transact business in the Eastern District of
Virginia, and because some of the violations of 31 U.S.C. § 3729 described herein occurred
within this judicial district.
24.
Before filing this Complaint, Relator served a copy of the same upon the United
States, together with a written disclosure statement setting forth and enclosing all material
evidence and information he possesses, pursuant to the requirements of 31 U.S.C. § 3730(b)(2).
25.
In accordance with the requirements of 31 U.S.C. § 3730(e)(4), Relator has direct
and independent knowledge of all publicly disclosed information upon which any allegations
11
herein might be deemed based, and Relator voluntarily provided such information to the United
States before filing this action. Accordingly, Relator qualifies as an "original source" as required
under 31 U.S.C. § 3730(e)(4).
Factual Allegations
A.
Overview of the SEAL Teams' Structure
1.
Naval Special Warfare Is the "Program Side" of the Navy.
26.
Naval Special Warfare Command ("WARCOM") oversees several divisions into
which the various SEAL teams fall: Naval Special Warfare Development Group, or SEAL Team
Six; Group 1, located in Coronado, San Diego, and home to SEAL Teams One, Three, Five, and
Seven (collectively, "NSW Group 1"); Group 2, located in Little Creek, Virginia, and home to
SEAL Teams Two, Four, Eight, and Ten (collectively, "NSW Group 2"); and Naval Special
Warfare Center ("NSWC"), home to the Advanced Training Command ("ATC") and Basic
Training Command for the SEAL Teams.
27.
WARCOM, SEAL Team Six, NSW Group 1, NSW Group 2, NSWC, and the
individual SEALs comprise the "program side" of the SEAL Teams. That is, each of these
groups attends training courses in various disciplines and makes recommendations to the
"contracts side" about the programs for which they would like the Navy to procure contracts and
incorporate into the SEAL Team training regimen.
28.
WARCOM constitutes the top level of the "program side" of the SEAL Teams
and is comprised of the senior leadership of NSW. Senior leadership provides direction and
guidance to the entire Command and often mandates requirements that all SEAL Teams must
follow.
12
29.
NSW Group 1 and NSW Group 2 comprise the second level of the "program
side" of the SEAL Teams. NSW Groups 1 and 2 consist of the SEAL Teams within each Group,
as well as a TRADET for each Group. NSW Group 1 and Group 2 TRADETs train the SEAL
Teams prior to operational deployment. The TRADET pre-deployment training cycle is known
as Unit Level Training ("ULT"). TRADETs establish the training curriculum for each SEAL
Team during its ULT. Oftentimes, the "contracts side" of the SEALs issues solicitations with
statement of work requirements that reflect the training necessities identified by the TRADETs
in ULT.
30.
The ATC at NSWC constitutes the third level of the "program side" of the
SEALs. Following ULT, each SEAL Team is allotted time to attend advanced training courses.
SEALs may attend CQD courses through ATC. CQD-certified SEALs assigned to ATC teach
CQD courses. SEALs assigned to ATC also teach new SEALs progressing through SEAL
Qualification Training ("SQT"). Since 2000, CQD training has been a requirement for all
SEALs in SQT. Many SEALs have requested that CQD training also become mandatory during
ULT.
31.
The SEALs themselves constitute the lowest level of the "program side."
Through requests, course critiques, and end-of-training reports, SEAL operators often request the
training they feel is most valuable to, and best prepares them for, their operations.
2.
FISC and LOGSU Are the "Contracts Side" of the Navy.
32.
Fleet and Industrial Supply Center ("FISC") and Logistical Support ("LOGSU")
comprise the "contracts side" of the SEAL Teams. That is, FISC and LOGSU act upon the
recommendations made by the "program side" to procure contracts in various training
disciplines.
13
33.
FISC is the civilian contracting arm of the Navy, and processes most naval
contracts.
34.
LOGSU is a contracting unit specific to the SEAL Teams. NSW Group 1 and
NSW Group 2 each possess a LOGSU.
B.
The "Program Side" Wants Operational Combatives Training.
1.
Operational Combatives Training Prepares SEALs for Actual Combat.
35.
Operational combativestraining prepares SEALs for actual combat by integrating
weapons and gear with unarmed combat skills.
36.
WARCOM defined the integration of armed and unarmed combat as "operational
training" only after Relator introduced the SEALs to this method of training. The SEALs had
determined that Relator's training, which integrated weapons and gear with unarmed combat
skills, as well as detainee handling, shooting skills, and force control, best prepared them for
actual combat. In contrast, the SEALs had determined that sport-based fighting and
choreographed systems taught in MMA-based courses develop dangerous techniques and skills
in the operator that are not useful in combat situations.
37.
MMA-based combatives trainingcourses are not operational combatives training
because, among other things, MMA teaches only hand-to-hand combat skills, without integrating
weapons and gear.
38.
MMA is often referred to as "sport fighting" because it has no application to the
high-risk environment in which SEALs operate. SOCS James Boychuk explained that"[sjport
fighting is based on rules, judgesand TV ratings
it only proves what is applicable and what
succeeds in the sport arena. It is not a proving ground for the high-risk fight."
14
39.
In addition, MMA is often referred to as "hobbyist" training. Senior leadership
refers to MMA as "hobbyist" training because WARCOM expects SEALs to pay for their own
hobbies, including pursuit of MMA skills, out of their own pockets; NSW does not wish to spend
funds on such training.
2.
CQD Is an Operational Training Program.
40.
CQD is an operationally focused, proprietary training program designed to train
operators to succeed in high-risk engagements on the battlefield. CQD was established to
provide the most practical and effective instruction and training for military and police special
operations teams.
41.
It seeks to teach operators isolation and development of body weapons in both
shooting and non-shooting situations, weapon control and retention, domination of contact and
shooting zones, compliant and non-compliant prisoner control, and proficiency in shooting skills.
CQD provides standardization of close combat skills, prepares the operator and the team to
control and dominate a close quarter fight, and teaches personnel to employ an appropriate level
of force in the face of a threat while developing the ethos and internal warrior.
42.
Relator knows that CQD is operational because Relator has successfully trained
military and law enforcement personnel in CQD, and such military and law enforcement
personnel have reported to Relator their successful use of CQD in the high-risk environment.
43.
Further, Relator knows CQD is operational because he personally spent intensive
time and effort developing and validating the CQD system.
44.
Relator began training in the martial arts at age fifteen. He quickly recognized
contradictions in his training, and began to seek a martial arts system that had application in a
high-risk, real world fight. He pursued his martial arts studies in Asia, including Hong Kong,
15
Okinawa, and Taiwan, seeking a martial arts master who could teach him the skills for the high
risk fight, rather than the choreographed skills he had learned in his martial arts studies. During
his studies, Relator developed a close personal relationship with a master teacher, through whom
Relator eventually became the highest-ranking student and inheritor of one of the original martial
arts systems. However, Relator's master teacher recognized that the type of training that Relator
sought, one that would serve in a high-risk fight, did not exist. Therefore, the master teacher
encouraged Relator to develop his own system.
45.
In 1981, Relator followed the master teacher's suggestion and began to develop
his own system. Initially, he tried to incorporate his previous martial arts training. But Relator
soon realized that his skills were not applicable to a motivated adversary in a real fight.
Oftentimes one martial arts system contradicted another. Moreover, because the martial arts
skills were based on choreographed actions or sport, rather than actual combat, they had little
relevance to an actual fight. Accordingly, Relator discarded his martial arts training. He began
to develop his system from scratch. He did so by simulating the real fights with the pressures
and adrenaline of a fight. This exposed the necessity to create specialized tactics and skills that
were directly applicable to this engagement. Through a unique and measurable validation
process, Relator confirmed that all CQD components applied to the actual fight, specifically
high-risk operations, and that the components aligned with science. After nine years of
development, CQD was born.
46.
As a result of Relator's lengthy development of CQD, and because Relator
discarded his martial arts training to develop CQD, the components of CQD do not derive from,
nor to they resemble, MMA.
16
47.
Relator has protected CQD's components by trade secret since its inception in
1981. In addition to trade secret protection, Relator protects his intellectual property through
non-disclosure and licensing agreements. Further, the names CQD and Close Quarters Defense
were copyrighted in 1989and 1999, respectively. Becauseof the highly confidential nature of
the training, NSW suggested that Relator maintain such intellectual property rights in CQD.
3.
SEALs Understand the Differences Between CQD, Which Is Operational,
and MMA-Based Combatives Training, Which Is Not Operational.
48.
All SEALs, from senior leadership through the individual SEAL operators,
understand the difference between the operational skills taught by CQD and the skills learned via
MMA, and in fact, SEALs know that MMA-based combatives training is not operational.
49.
For example, in the mid 1990's, lead SEAL instructor Chief Mike Ferguson
explained why CQD better served the SEALs' needs than MMA-based combatives training.
Ferguson stated, "At one time our [combatives] course was very eclectic. Course lesson topics
included ground fighting, knife/stick fighting... and other questionable tactical material. In
retrospect, not a single thing was ever learnedfrom any ofthe training mentioned above that
actually helped us prepare ourselves and ourfellow SEALs for combat
only the CQD™
material actually helped SEALs perform the types of mission essential skills that SEALs are
required to perform. In the high stress environment in which SEALs operate, where the
possibility of death is very real, nothing that was ever learned from the 'sport' guys or the
'scammers' was of any value."
50.
Further, in an email dated April 24,2008, Command Master Chief Dave Cooper
recognized that MMA skills are taught for competition. Cooper stated, "As for the arts that
comprise MMA - namely Muay Thai, Wrestling, Boxing and Jiu-Jitsu - we have to be wary of
teaching the 'ring mentality.' Not everything that works in a Thai Boxing match, for instance,
17
applies to an actual fight, and while learning the rules is appropriate for safety in training,
'unlearning' them is necessary for winning an actual fight."
51.
Similarly, in an email dated May 2,2008, LCDR Joseph Burns stated that, " 18
years ago when we started using Duane's system, it was the only system that had tactical
application. We had guys at Dev Group [SEAL Team Six] doing all sorts of Kung-Fu crap, from
JKD to Brazilian Jujitsu, myself included.... Duane at least had a system that incorporated all
of your kit and utilized tactical scenarios to teach and re-enforce."
52.
SEALs have consistently expressed their desire to follow an operational
combatives training program. As SOCS James Boychuk stated, "there is a difference of opinion
when it comes to NSW Combatives. This difference, however, is not from the operators who are
deploying overseas. If we must train as we fight, then we should not try to rationalize how an
exploited sport activity is somehow good operational training."
C.
Because the SEALs Want Operational Combatives Training, the SEALs Adopted
CQD into the SEAL Training Regimen.
1.
Relator Introduced CQD to SEAL Team Six in the Late 1980s.
53.
In the late 1980s, after spending nine years in the development of CQD, Relator
was locally and federally deputized as part of the Drug Enforcement Agency's Organized Crime
Drug Enforcement Task Force on the Eastern Shore of Maryland. Relator successfully used
CQD in a variety of operational tasks, including surveillance, search warrant service, debriefing
and controlling confidential informants, intelligence gathering, room entry raids, and high-risk
felony arrests.
54.
Because of Relator's success in the law enforcement context, in the late 1980s,
various state and federal law enforcement agencies began to request CQD training. One such
18
request came from a member of SEAL Team Six's Assault Teams. SEAL Team Six's Assaults
Team requested that Dieter consider training the Navy SEALs in CQD.
55.
In 1989, Relator provided a demonstration of CQD for SEAL Team Six. This
demonstration led to a one-week course at CQD headquarters for the SEAL Team Six Assaults
Team.
56.
The one-week course at Dam Neck was a success. Because the Assaults Teams
of SEAL Team Six found CQD to be a valuable training method, it made a recommendation to
all of SEAL Team Six that CQD be adopted as part of the training program at Dam Neck.
57.
In 1991, Relator was awarded a contract by SEAL Team Six and began training
SEALs at the Dam Neck compound.
58.
News of CQD's success spread from the members of SEAL Team Six Assaults
Teams to other SEAL Team Six members. Contemporaneous course critiques reflect the
SEALs' approval of the CQD training.
59.
By 1995, NSWDG acknowledged that approximately 75% of all SEAL Team Six
operators had completed CQD courses, and that SEALs continued to express an interest in CQD
training. Personnel trained in CQD included Assault Teams, Boat Teams, Sniper and
Reconnaissance Teams, security and support personnel, operational support units (Explosives
Ordinance Disposal and U.S. Air Force), and a specially trained group of tactical role players.
60.
In light of this support from the SEALs, NSWDG developed a training plan
outlining a method to expand CQD training to all ofNSW.
61.
From 1991 until 2003, SEAL Team Six continually contracted with Relator to
teach CQD to SEAL Team Six.
19
2.
Relator Introduced CQD to Other SEAL Teams in the 1990s.
62.
As SEAL operators left SEAL Team Six and moved to other SEAL Teams, they
exposed other SEALs to CQD training. Accordingly, other SEAL Teams began to request CQD
training.
63.
Both NSW Group 1 and Group 2 SEAL Teams began to request CQD training. In
response, Relator began teaching initial and advanced courses to various NSW Group 1 and
Group 2 SEAL Teams.
64.
On May 29, 1996, NSWC officially approved CQD for adoption. Since June
1996, NSWC has taught CQD techniques exclusively.
3.
SEALs Highly Valued Their CQD Training.
65.
Nonpublic after action reports, course critiques, and internal Navy
correspondence demonstrate that CQD is the only training system that bears operational
relevance to the SEALs' missions.
66.
Further, the SEALs highly valued their CQD training, and frequently stated that
CQD should be mandatory training for all platoons. Nonpublic after action reports, course
critiques, and internal Navy correspondence validate this fact.
67.
For example, in 1995, Szymanski stated that CQD was "[outstanding - this really
gives the guys some decent skills to dominate the room and the 'bad guy' while retaining
weapon, control."
68.
A 1996 course critique from SOCM Dave Cooper stated that the CQD training
was practical and easy to maintain. In 1997, Cooper commented that CQD provided "[g]ood,
basic techniques that are applicable to a variety of situations."
20
69.
In a course critique authored in 1997, Master Chief James Hintzke stated, "All of
this training needs much more review and maintenance. This is the best system out there. You
don't stop shooting after [the shootingcourseof instruction.] Then why do we only train CQD
during scheduled [courses of instruction]." Laterthat same year, Hintzke urged, "Let's buy
some gear and make this something we can do every day."
70.
In May 1998, Mike Brunst stated of his CQD training, "Great course, had a lot of
fun and learned a lot."
71.
In 1999, LCDR Willink explained that CQD benefitted the SEAL Teams on
several levels: "Platoon unit integrity, development of [Standard Operating Procedures], room
control, crisis expectation/reaction. In an ARG PLTI did we worked side by side with force
recon, they had no plan/SOP/skills for prisoner handling and it was obvious. Our [platoon] have
been through CQD and it showed."
72.
Several SEALs drafted point papers or memoranda for the file expressing their
support of CQD. On August 5,2000, Dan Simpson, Sniper and Reconnaissance Team Leader at
Dam Neck, drafted a memorandum which stated, "COD® is the best system I have been
exposed to that prepares people and Teams for the realities of close combat." (emphasis in
original).
73.
On August 31, 2001, Admiral Olson stated, "In my view, CQD is the kind of
training that saves lives and keeps people in the Teams."
74.
On December 20, 2001, BMC Brian Cooper echoed this sentiment when he
submitted a memorandum summarizing the sole source justification for CQD manuals. Cooper
stated: "Mr. Duane Dieter of Easton, Maryland is the only one to offer a system that is relevant
to actual NSW missions."
21
75.
In 2002, Admiral Olson presented Relator with the Navy Superior Civilian
Service Award Citation, which stated: "A highly acclaimed expert, Mr. Dieter was a key advisor
to Commander, Naval Special Warfare Command and made significant contributions to the longterm success of the Naval Special Warfare community. Developing a program tailored to
enhance warrior capabilities, he expertly trained deploying SEALs in mission critical skills.
Many times his training had directly related to success in missions of National importance. By
establishing levels of training to meet Force requirements, Mr. Dieter has helped to ensure
SEALs will be ready when duty calls."
76.
In October 2003, John Previtera stated, "Mr. Dieter and his staff are professional,
ethical people with a clarity of purpose. The training is 100%operational and its further infusion
into the teams will make us better operators and men."
77.
On January 8,2004, CW02 Loo sent an email to NSWC entitled,
"Congradulations [sic] to the CQD boys!" In his January 8, 2004 email, Loo stated that CQD "is
directly responsible for our deployed platoon's current success in the nightly operations in Iraq.
I personally feel this training is the MOST IMPORTANT/MOST CRITICAL training this
platoon can get prior to deployment.... Most operators feel they couldn't have done the job
without this training, and that it may have saved lives (both innocent and our operators)."
78.
On February 10, 2004, QMC Walter S. Dittmar sent a memorandum to LCDR
Anthony P. Baker explaining the need for funding to complete construction of a CQD training
facility. Dittmar stated, "The skill sets taught and reinforced in this course of instruction have
been continually proven effective in real world situations and documented by NSW
operators.... Given the current mission status of NSW, this should be given the highest level of
importance further ensuring the preparation of our Warriors for combat."
22
79.
In November 2004, Jon Dozie stated: "CQD enhances every and all facets of
your operational life! From being safe at home to operating in the real world, the tactics,
techniques and principles CQD not only teaches, but instills in the operator, is life changing and
life saving."
80.
In March 2005, John Kingsbury stated: "The force control learned in CQD is
very relevant and we don't practice it anywhere with the same complexity and intensity as we do
at CQD."
81.
On June 3, 2005, LCDR Van T. Wennen sent a memorandum to NSWC CQD
instructor staff praising CQD. Wennen stated, "Our men received some of the best and most
combat applicable instruction from your staff during our CQD-2 course of instruction. We
cannot overstate the value and positive impact you made upon our unit through this most
essential week of learning and instruction."
82.
On July 20, 2007, LCDR Matthew D. Russell stated: "I strongly support CQD
training for the following reasons ... CQD is a phenomenal system for developing small tactical
units that can accomplish the full spectrum of operations and react quickly to uncertainty and
lethal danger.... we have barely scratched the surface with the potential of the program....
CQD will be invaluable in the professional development of our newest personnel in the years to
come so we can maintain and improve the outstanding capability and reputation of the NSW
community."
83.
In 2007, CAPT Herbert, Commanding Officer of NSWC, stated: "I don't...
support any combative system other than CQD on NSW's dime."
84.
In an End of Training Report compiled after the completion of an April 7-11,
2008 CQD course, SOC E.J. Soland stated, "The dieter [Course of Instruction]/Method is
23
specifically focused on NSW operations (unlike other forms/systems of martial arts). Having
trained most of my life in boxing, muay thai, jeet kun do, wing chun, penjack, silat, kali and
escrima; I can honestly say that this method/system is better suited toward instructing/preparing
NSW operators.... [T]he Dieter system is best suited to increase operator's safety and
operational capability during real world operations."
85.
In 2008, Waco Davis informed CQD instructors that all of the deployed SEALs
use CQD in their overseas missions, and that no SEALs use MMA when deployed on missions.
86.
In June 2009, Chad Cleaver stated, "I feel 100% confident that CQD works and is
the only system for an operator."
4.
Leadership Made CQD the NSW Training Standard and CQD Received
Multiple Sole Source Contracts.
87.
As early as 1997, the upper level of the "program side" of the SEALs, including
commanding officers Admiral Olson and CAPT Yarborough, recognized the many positive
student course critiques and reviews, as well as the fact that CQD proved to be the only system
relevant to the SEALs' missions, and responded to students' requests for more training by
making CQD the training standard for the SEAL Teams.
88.
In 1997, CQD was awarded a sole-source contract to teach CQD at NSW. The
justification forthe sole-source contract stated, "Over the last four years, NSW Combat Fighting
Course instructors have trained with many national and international martial arts experts to
ensure that we are providing the best training possible. While these 'experts' are top in their field
of competitive or 'sport fighting,' only one offers a system that has relevance to actual NSW
mission requirements. That instructor is Mr. Duane Dieter of Trappe, Maryland. Mr. Dieter's
Close Quarters Defense (CQD) program is a complete armed and unarmed combat system which
includes firearms, edged and blunt weapons training, prisoner handling techniques, and personal
24
defensive skills. His CQD system is already being used exclusively by Naval Special Warfare
Development Group."
89.
On October 30, 1998, NSWC stated, "Based on positive student feedback and the
success of CQD's TTP [tactics, techniques, and procedures] used by tier one forces, [NSWC]'s
CFC instructs only the CQD method of defense."
90.
In 1999, CQD was awarded a contract to train SEAL Team Four platoons. These
platoons instituted a six-year training program with CQD.
91.
Also in 1999, CQD was awarded a sole-source contract to teach CQD at NSW.
The justification for this sole-source contract stated, "During the 1990-1996 time period, Naval
Special Warfare close fighting training evolved from an eclectic, non-standardized approach to
sole utilization of Mr. Duane Dieter's CQD which is standardized and interoperable with NSW
mission requirements. This evolution process included NSW community utilization of a variety
of martial arts, sport fighting systems, and choreographed systems. Lives and national prestige
are on the line when SEALs are employed operationally. CQD training provides our men the
tools they need to control demanding situation and achieve mission success."
92.
In September 2000, CQD was awarded a contract and was officially adopted into
the SEALs' basic training regimen, including Basic Underwater Demolition/SEAL 1st, 2nd, and
3rd Phases, as well as SQT.
93.
In Sole Source Justification N45004-8023-AT08, the Navy stated that "[t]his
contract requirement has been put out for bid three times during this timeframe and CQD® has
been awarded the contract all three times demonstrating that they are the only company that can
provide the high quality close combat training needed for NSW operators.... It can be
25
concluded, with its long proven track record and high demand for training within NSW, that
CQD® is justifiably the sole source for our highly specialized training requirements."
94.
In 2003, NSWC awarded CQD a five-year contract to develop a new instructor
course and course related materials, new instructor sustainment training program, and a new
operator course student guide.
5. Because of CQD's Success as an Operational Training Program, and Because of
Its Direct Relevance to NSW Missions, the Navy Stated that It Would Procure
Future Contracts Only for Operational Training Programs.
95.
During the course of its contracts with NSW, CQD has never received a negative
past performance evaluation from the Government.
96.
In 1997, Admiral Olson served as Commander of NSWDG. He issued a NSWDG
Commander's Policy Statement that stated: "The training standard for close quarters armed
combat and unarmed battle is the Dieters Close Quarters Defense System. Dieters CQD is the
only hand-to-hand combat course authorized for funding byNSWDG, and will be scheduled by
Blue, Gold, Red, Green and Gray Teams for initial and sustainment training." Further, Olson
stated: "Other martial arts disciplines may be pursued for hobbyist or competitive purposesat
individual member's expense on his or her own time."
97.
In 2001, Admiral Olson served as the Commander of all SEALs at WARCOM.
He stated, "My intent is that we, as community leaders, identify CQD as NSW's defense/fighting
system of choice based on it real operational applicability and lack of 'hobbyist' connotation (it's
also the NSW course that is the highest rated by the students who take it), and then we work to
move our people up the CQD training ladder at an appropriate pace."
26
98.
Ultimately, Admiral Winters ordered that no NSW funds would be spent on
"hobbyist"or sport-fighting training, such as MMA-based combatives training. Admiral Winters
intended for NSW to fund only those courses, like CQD, that teach SEALs operational skills.
99.
Senior leadership issued this guidance because they had determined that CQD
training was the only training that bore direct relevance to the SEALs' operations and to NSW
missions. In addition, SEAL operators continuously reported to commanding officers that they
wanted more CQD training.
100.
Accordingly, Relator alleges that its operational relevance and 20-year history of
success with NSW resulted in senior leadership (the top level of the "program side" of NSW)
directing that all Government contracts for combat training for the SEAL Teams must procure
operational training. Forexample, Solicitation Number H92240-09-R-GN47, issued in 2009,
and Solicitation Number H92240-10-T-0022, issued in 2010, stated: "Due to the confidential
nature of NSW, training will be specifically for military operations andtechniques used will not
be such that is common knowledge to the general public
Competition or sport based training
techniques will not be incorporated into training." Further, in Solicitation Number H92244-11T-0010, which issued in 2010 and seeks combative training for SEAL Team Six, the solicitation
states, "Course instruction should be operationally focused."
D.
Linxx, Cucci, and Szymanski Conspired to Remove CQD from NSW's Training
Regimen and to Replace CQD with Linxx.
101.
Relator alleges that CQD's longstanding success and continuous contract awards
displeased gyms that teach MMA courses which have been excluded from the bidding process
because of CQD's status as sole source. Further, Relator alleges that CQD's longstanding
success and continuous contract awards displeased SEALs who had personal and financial ties to
gyms that teach MMA.
27
102.
Specifically, Relator alleges that CQD's longstanding success and continuous
contractawards displeased Cucci and Linxx because Linxx was excluded from bidding during
CQD's sole-source contracts. Relator alleges that CQD's longstanding success and continuous
contract awards displeased Szymanski because Szymanski had personal ties to Linxx.
103.
Relator alleges that because CQD's longstanding success and continuous contract
awards displeased Cucci, Linxx, and Szymanski, they conspired to remove CQD from NSW's
training regimen and to replace CQD with Linxx. Relator further alleges that Szymanski used
his position within NSW to dupe the Government into believing that Linxx's MMA-based
combatives training met the Government's operational requirements in order to influence and
deceive the "contract side" of NSW into contracting for Linxx's MMA-based combatives
training courses.
1.
Szymanski Personally Benefitted from the Agreement with Linxx to Remove
CQD from NSW's Training Regimen.
104.
Relator alleges that Szymanski stood to gain personal benefits from contracts with
Linxx for MMA-based combatives training because Szymanski wished to funnel contracts to his
personal friend and former SEAL Team Six Blue Team member, Cucci.
105.
In addition, Relator alleges that Szymanski stood to gain personal benefits from
contracts with Linxx for MMA-based combatives training because Szymanski thought himself
proficient in MMA and despised CQD.
106.
For example, in April 1993, while a member of SEAL Team Six, Szymanski
attended CQD training courses at Dam Neck. Szymanski provided a positive review of his CQD
training. Despite his positive evaluation of his CQD training course, however, after completion,
Szymanski approached Relator with a proposition to change the course. Szymanski invited
Relator to his home, where he requested that Relator change the training to be based on martial
28
arts. Szymanski asked that Relator implement a belt system, as there is in martial arts.
Szymanski related that this was the type of training he could "get behind," and informed Relator
that he was an up-and-coming officer who was "going places." Szymanski told Relator that if
Relator followed Szymanski's direction, both parties would benefit. When Dieter explained that
he could not change the system because martial arts did not relate to operational training,
Szymanski asked Dieter, "Do you want to train the guys or not?" Dieter responded again that
martial arts were not operational, that martial arts would not prepare the SEALs for combat, and
that NSW asked him to teach operational skills, not MMA, which did not constitute a beneficial
use of tax payers' money. Szymanski replied, "Well you have a big decision to make and if I'm
behind you, we can work somethingout that's going to benefit both of us." Szymanski then
asked a second time, "Do you want to train the guys or not?" Dieter replied that he did want to
train the SEALs, but that he could not change the CQD system as Szymanski was suggesting, nor
could he consider the proposition.
107.
Dieter understood Szymanski to mean that Szymanski exercised influence over
the contract procurement process through which CQD was awarded contracts to teach the Navy
SEALs, and that if Dieter wished to continue teaching the SEALs CQD, he should enter into an
agreement with Szymanski.
108.
Relator alleges that his refusal of Szymanski's solicitation of a bribe engendered
Szymanski's animosity toward Dieter and toward CQD.
109.
Similarly, Relator alleges that, in 1996, Admiral Olson prevented Szymanski from
participating in a televised bout between Szymanski and Dale Comstock, a member of the
Army's special operations team, because the Navy does not support participation in non-
Department of Defense sanctioned and commercial combat-oriented events and the Navy does
29
not desire exposure of its classified military units. Indeed, in 2008 Admiral Olson issued Policy
Memorandum 07-17, which prohibited mixed martial arts, cage fighting and combat boxing
events, tough man contests, combat mission competitions, survival events, and other nonDepartment of Defense competitions pitting special operations forces and other elite Government
agencies against each other.
110.
Because Admiral Olson supports CQD and has publicly acknowledged its training
benefits to the SEAL Teams, Relator alleges that Olson's decision to prevent Szymanski from
participating in the televised fight further engendered Szymanski's animosity toward CQD.
2.
Linxx Benefitted from Szymanski's Actions in Furtherance of the
Conspiracy to Remove CQD from NSW and to Replace CQD with Linxx.
111.
In 2003, SEAL Team Six ceased its relationship with Relator and discontinued
the CQD course. Relator alleges that SEAL Team Six terminated its relationship with Relator
without cause, and contrary to the operators' requests.
112.
Upon information and belief, Linxx submitted a bid for, and won, a contract to
train SEAL Team Six.
113.
In 2003, Linxx replaced CQD at Dam Neck and began providing MMA-based
combatives training under a contract with SEAL Team Six. Linxx has provided and continues to
provide MMA-based combatives training SEAL Team Six since 2003.
114.
In 2005, Szymanski told Relator that he intended to have Cucci train the SEALs.
115.
In 2005, Group 2 began expressing to NSWC that it sought to adopt a combatives
course other than CQD.
116.
Upon information and belief, Linxx submitted a bid for, and won, a contract to
teach NSW Group 2.
30
117.
In 2005, NSW Group 2 began training with Linxx in an MMA-based combatives
118.
In a 2005 publication, Cucci discussed the SEAL Teams' push to move away
course.
from CQD to an MMA-based system and stated that, in his opinion, CQD was a fad.
119.
In October 2006, Linxx won an award to conduct MMA-based combatives
training with NSW.
120.
In or about June of 2008, Linxx held an employee meeting. During that meeting,
Linxx Director of Operations Mike McGuire stated to all present that Linxx was using all of its
resources to destroy CQD and to ensure that CQD does not receive another sole source contract.
Joost Jansen heard McGuire make this statement and relayed this information to Relator.
121.
In May 2008, Linxx was awarded a Combatives Training Services contract with
Naval Supply Systems Command to conduct MMA-based combatives training.
122.
On September 2, 2008, the Navy issued a notice relating to Solicitation Number
H92240-08-T-TR07. The notice stated that the Navy intended to award a sole source firm fixed
price contract to Linxx to teach prospective instructors and deploying units going through the
Group 1 Training Detachment Assaults block combative skills.
123.
Linxx received a contract award as a result of Solicitation Number H92240-08-T-
124.
On September 17, 2009, Linxx was awarded a contract for Expeditionary
TR07.
Training Command High Threat Instructor Training.
125.
On January 8, 2010, Linxx was awarded a contract with Naval Beach group
personnel for a ten-day defensive combat operations training course.
31
126.
Upon information and belief, Cucci knew Szymanski was facilitating Linxx's
contract awards.
127.
In addition to the contracts identified above, from 2005 to date, over $30 million
has been awarded to Linxx has through numerous other purchase and delivery orders. See
http://www.usaspending.gov/search?query=&searchtype=&formFields=eyJTZWFyY2hUZXJtIj
pblmxpbnh41119. Accordingly, Relator alleges that Linxx has submitted records, claims, bills,
invoices, and/or statements for payment to the Government.
E.
Szymanski and Linxx Undertook Significant Actions in Furtherance of the
Conspiracy to Remove CQD from NSW and to Replace CQD with Linxx.
1.
Szymanski Ensured Attendance at Linxx Courses.
128.
In 2006, Linxx's MMA-based combatives training courses were poorly attended.
Indeed, Brian Locey stated, "If people don't start attending Linxx training, it's going away."
129.
In response, Szymanski informed the Master Chiefs of each of the Teams at Dam
Neck to make Linxx's MMA-based combatives training mandatory for the Dam Neck SEAL
Teams. This ensured that Linxx training courses would be well-attended, and that Linxx would
continue to receive funds to teach courses at Dam Neck.
2.
Szymanski Generated Opposition to CQD to Prevent Renewal of its Sole
Source Contract.
130.
Upon information and belief, in 2007 and 2008, as CQD's five-year contract drew
to a close, Szymanski generated opposition to renewal of CQD's contract so that Linxx could
begin providing MMA-based combatives training to the SEAL Teams. Relator alleges that
Szymanski was able to do so because of his position on the "program side" of NSW.
131.
Because CQD's contract was coming to a close, in or about 2007, Linxx provided
a demonstration of its product, i.e., its MMA-based combatives training courses, to NSWC for
32
consideration. After the presentation, CAPT Herbert decided that Linxx was not as operationally
focused as CQD, and was too sport-based in nature. Herbert decided to continue with CQD and
directed LT Rangel and SOCS Boychuk to pursue a one-year, sole-source contract with a fouryear option for CQD.
132.
In the fall of 2007, Relator and CQD Course Manager Eric Deming met with
SOCM Jim Hintzke regarding what Relator and Deming perceived to be mounting opposition to
CQD and support for Linxx's MMA-based combatives training. Hintzke told Relator and
Deming that "a few immature people" at Dam Neck were responsible for generating opposition
to CQD and support for Linxx's MMA-based combatives training, and that he would speak to
the SEALs at Dam Neck to resolve the problem.
133.
In or about the fall of 2007, after Hintzke's meeting at Dam Neck, Hintzke
informed Deming that he had met with a Captain at Dam Neck, and that the Captain had
informed Hintzke that if Relator and/or CQD endorsed an MMA-based combatives training
program, Relator would be allowed to teach a two-week CQD course at Dam Neck. Deming
relayed this message to Relator.
134.
In the fall of 2007, Szymanski served as the only Captain at Dam Neck.
Therefore, Deming knew that Hintzke was referring to Szymanski when Hintzke said he had met
with a Captain at Dam Neck.
135.
Furthermore, while there are many gyms that teach MMA, in the fall of 2007,
Linxx was the only vendor providing MMA-based training at Dam Neck, and Linxx had been
doing so since 2003. Therefore, Deming knew that Szymanski wanted Relator and/or CQD to
endorse Linxx's MMA-based combatives training program. Deming relayed this information to
Relator.
33
136.
On December 5,2007, Hintzke sent an email to all of NSW calling a meeting to
discuss concerns about CQD (the "Anti-CQD meeting"). The email stated that the purpose of
the meeting, in part, was to consider whether CQD was precluding the use of and training in
other martial arts. Hintzke's email further stated that, "[attendance [at the meeting] from 'antiCQD' SEALs is mandatory."
137.
Upon information and belief, Hintzke organized the Anti-CQD meeting at
Szymanski's request or order.
138.
Other SEALs expressed concerns about the intention behind the Anti-CQD
meeting. Specifically, in response to Hintzke's email calling the Anti-CQD meeting, CAPT Wes
Spence replied, "CQD is the approved standard and the Groups (whether they know it or not) are
required to send their personnel to the course .... Asyou all know, (here are afew (highly vocal)
critics ofDieter/CQD. While this in andofitselfis not a big concern ofmine, the ulterior motive
ofcritics is... many ofthe critics have the notion that they can make a buck or two by being the
'answer' to Dieter. Please reiterate to this crowd that there is no T in 'Team.'" (emphasis
added).
139.
In addition, LCDR Matthew Russell noted that "the East Coast CQD program is
slightly behind in its training capability and is fighting against a greater emotionally driven bias,"
and, on June 26,2008, SOCS James Boychuk stated, "Sport based fighting has no place in
NSW's operational training curriculum."
140.
As a result of the Anti-CQD meeting, attendees generated a report entitled, "NSW
Combative Forum AAR." The report contained slides that detailed alleged disadvantages should
NSW continue to contract with CQD to train the SEALs. Among these alleged disadvantages,
the report stated that: (1) CQD discourages other martial arts; (2) with the exception of Relator,
34
CQD instructors were not world-class experts; (3) SEAL training should not fall under the
purview of a civilian company; and, (4) operators with a CQD background have found the CQD
system unable to meet today's battlefield needs.
141.
The NSW Combative Forum AAR report contained untrue statements about
CQD. Indeed, Spence rebuked the authors of the NSW Combatives forum AAR report because
the report was "laden with inflammatory opinions and outright untrue assertions." In particular,
Spence noted that although criticism of CQD frequently stated that it did not meet operational
requirements, the report did not identify a single operational requirement which CQD had failed
to meet.
142.
After the Anti-CQD Meeting, on April 24,2008, Master Chief Dave Cooper
emailed other SEALs disparaging remarks about Dieter and CQD, stating, "Duane needs to go,"
and encouraging SEALs to "[s]eek out as many reputable instructors as you can" in the various
martial arts, rather than train solely in CQD.
143.
Cooper trains with Linxx and is a personal friend of Cucci.
144.
Upon information and belief, Cooper sent this communication and other similar
communications at Szymanski's request or order.
145.
Upon information and belief, Linxx knew that Szymanski was taking such steps
to disparage and undermine CQD in furtherance of the plan to remove CQD from NSW and to
replace CQD with Linxx.
3.
Willink Discouraged the Use of CQD and Promoted the Use of MMA-Based
Combatives Training.
146.
In May 2008, Willink disseminated emails containing a PowerPoint slideshow to
senior NSW officers about the CQD training program. Those emails discouraged the use of
35
CQD to train the SEALs and promoted the use of MMA-based combatives training to train the
SEALs.
147.
Willink's statements about CQD in the PowerPoint slideshow were false.
148.
In August 2009, Willink and subordinate members ofNSW Group 1 TRADET
began developing their own combatives program based entirely on MMA. Willink presented a
manual for this MMA-based combatives training course as an operational alternative to CQD.
149.
In or about 2010, SEAL Team One requested to attend CQD training during ULT.
Leadership denied this request. SEAL Team One was ordered to attend the MMA-based
combatives program personally developed by Willink and subordinate members of NSW Group
1 TRADET.
150.
Relator alleges that Willink mandated that SEALs attend his MMA-based
combatives training course for the purpose of establishing a foundation amongst the SEALs that
MMA-based combatives training served their training needs, thereby favoring Linxx.
4.
Linxx Hired SEALs Who Openly Degraded CQD's Reputation and
Supported MMA-Based Combatives Training.
151.
Linxx hired SEALs who openly degraded CQD's reputation among the SEAL
Teams. For example, during his time as a SEAL, Frank Brown wrote a point paper disparaging
CQD. After Brown's discharge from the Navy, Linxx hired Brown.
152.
Similarly, SOC Mike Brunst wrote a deficiencies report on behalf of NSW Group
2 TRADET. This deficiencies report disparaged CQD and promoted MMA-based combatives
training. Ultimately, Brunst's report became a part of the May 8, 2008 Deficiencies Report.
Brunst currently trains at Linxx, and during Linxx courses at NSW, Linxx used Brunst as a
Linxx instructor.
36
5.
Szymanski Co-Authored a Section of the Deficiencies Report.
153.
On May 8, 2008, the Deficiencies Report issued. The Deficiencies Report
contains commentary on why the Navy should not renew the CQD contract for SEAL Team
training.
154.
Relator alleges that the Deficiencies Report targeted CQD in an effort to remove
CQD from NSW's training regimen and to replace CQD with Linxx. Further, Relator alleges
that the Deficiencies Report was intended to influence the "contracts side" of NSW, who would
ultimately procure contracts to train the SEALs.
155.
Szymanski authored the SEAL Team Six portion of the Deficiencies Report. This
section of the Deficiencies Report suggests that future contracts obtain MMA-based combatives
training.
156.
Brunst, who simultaneously serves as a SEAL and a Linxx instructor, authored
the NSW Group 2 TRADET portion of the Deficiencies Report.
157.
The portions of the report authored by Szymanski and Brunst contain nearly
identical language discouraging the continued use of CQD and promoting the use of MMA-
based combatives training. Similarly, portions of the Deficiencies Report contain copies of the
slides generated as a result of the Anti-CQD meeting, which discourages the continued use of
CQD and promotes the use of MMA-based combatives training.
158.
Because sections of the report contain overlapping information, Relator alleges
that Szymanski, Brunst, and others shared drafts of their sections of the report prior to its
dissemination in final form. Relator alleges that Szymanski, Brunst, and others did so because
the Deficiencies Report was intended to influence all levels of the "program side" of NSW for
37
the purpose of duping NSW into believing that Linxx's MMA-based combatives training met its
operational needs.
159.
The statements about CQD in the Deficiencies Report are false. Many after
action reports and student critiques hail the value of CQD and its relevance to SEALs' missions,
directly contradicting the statements in the Deficiencies Report.
160.
Admiral Winters informed Relator that he was concerned about the Deficiencies
Report because it appeared to be an official report from NSW, but it had not been endorsed by
Winters or his staff. Accordingly, the Navy investigated the issuance of the Deficiencies Report.
161.
On or about August 12,2010, the Navy concluded its investigation of the
Deficiencies Report. The Navy' investigation of the Deficiencies Report found that the SEALs'
combatives training had been the subject of many emails and meetings, and that the Commander
of NSWC had already issued guidance stating that no NSW funds will be expended to contract
for MMA, hobbyist, or sport-fighting or tournament style combatives. Nevertheless, the Navy
concluded that the Deficiencies Report did not negatively influence the contracting decisions for
the combatives program.
162.
However, there was no indication that the Navy knew of the close personal
relationship between Szymanski and Cucci. This information was not uncovered by the Navy's
investigation of the Deficiencies Report.
163.
Despite the fact that no formal reprimand issued against Szymanski, Relator
alleges that, as a result of his involvement with the Deficiencies Report, Szymanski was
informally reprimanded. Specifically, Relator alleges that Szymanski was informed that he
would not become the Commanding Officer at Dam Neck, nor would he make Admiral, which
was his projected career path and personal desire.
38
6.
Szymanski's Opposition to CQD and Support for Linxx Affected NSW's
Renewal of the CQD Contract.
164.
From January to May 2008, the renewal of the CQD contract with NSW was
delayed. Relator alleges that the delay resulted from Szymanski's efforts to remove CQD from
NSW and to replace CQD with Linxx.
165.
During the delay, the "contractside" consulted NSW Groups 1 and 2 to determine
their input on the statement of work for the CQD contract.
166.
While this review was pending, on May 2, 2008, FISC issued a one-year
extension of CQD's contract.
167.
In the fall of 2008, during the one-year extension of CQD's contract, NSW
Groups 1 and 2 submitted statements of work for a new combatives training program.
168.
On December 4,2008, SOCM Williams informed former CQD instructor Eric
Deming that NSW Groups 1 and 2 were switching to Linxx's MMA-based combatives training
program, and that if the ATC Detachment Little Creek, Virginia did not "geton board" with this
program change, there would soon be no CQD program at the ATC Detachment Little Creek.
169.
Upon information and belief, Linxx knew that NSW Groups 1 and 2's decisions
to switch to Linxx's training program resulted from Szymanski's actions in furtherance of the
plan to remove CQD from NSW and to replace CQD with Linxx.
170.
Relator alleges that, after Linxx was awarded a contract under Solicitation
Number H92240-08-T-TR07, Szymanski continued to take actions in furtherance of the
conspiracy to remove CQD from NSW and to replace CQD with Linxx.
171.
Typically, FISC, the civilian contracting arm of the Navy, processesmost naval
contracts. For example, FISC processed the 2003 sole source contract award to CQD.
39
Accordingly, Relator believed that when the 2003 CQD contract ended in 2008, FISC would
process the CQD contract renewal.
172.
Instead of processing a contract renewal for CQD, however, FISC processed a
one-year extension of CQD's contract through 2009.
173.
Upon information and belief, at the close of the one-year contract extension, FISC
refused to continue to process contract extensions for CQD.
174.
Upon information and belief, when the one-year extension terminated in 2009, the
responsibility for issuing an additional one-year extension was sent through NSW Group 1
LOGSU, a contracting unit specific to the SEAL Teams and run by SEALs.
175.
Upon information and belief, the contract renewal was delayed so that the CQD
contract would have to go through LOGSU, where Szymanski would be able to exercise
influence over the SEALs in LOGSU involved in the procurement process.
176.
Upon information and belief, Szymanski did exercise influence over SEALs in the
procurement process to delay the award of a contract to CQD.
177.
LOGSU issued an extension until July 31, 2009. Such extensions are commonly
referred to as bridge contracts.
178.
On June 5,2009, after the 2003 CQD sole source contract had ended, and prior to
the end of the bridge contract, NSW issued Solicitation Number H92240-09-R-GN47 for
combatives training.
179.
The June 5, 2009 solicitation stated, "Due to the confidential nature of NSW,
training will be specifically for military operations and techniques used will not be such that is
common knowledge to the general public.... Competition or sport based training techniques
will not be incorporated into training."
40
180.
CQD competed in open competition to win the June 5,2009 solicitation for
combatives training. Specifically, CQD competed against Linxx in open competition.
181.
Competition for the June 5, 2009 solicitation occurred before a Technical
Evaluation Board comprised of SEALs. SEALs evaluated vendors' demonstrations.
182.
CQD beat Linxx and won the 2009 open competition for combatives training.
183.
Despite CQD's win in open competition, LOGSU did not award it a new contract.
184.
Instead, on August 20, 2009, NSW cancelled the solicitation, citing a change in
the Government's requirements.
185.
Despite its win in open competition, because CQD was not awarded a contract
renewal, LOGSU processed a second bridge contract for CQD. The bridge contract lasted until
February 2010.
186.
While the renewal status of CQD's contract remained uncertain, Willink began
mandating that SEALs at NSW Group 1 TRADET attend an MMA-based combatives training
course developed by Willink and other members of NSW Group 1 TRADET. Further, Willink
refused to allow CQD training for NSW Group 1 SEALsduring TRADET. As stated above,
Relator alleges that Willink mandated that SEALs attend his MMA-based combatives training
course for the purpose of establishing a foundation amongst the SEALs that MMA-based
combatives training served their training needs, thereby favoring Linxx.
187.
On November 19, 2009, NSW issued a second solicitation for combatives
training. The November 19, 2009 solicitation was substantially similar to the June 5,2009
solicitation, which CQD won. In fact, the statement of work in the November 19,2009
solicitation was identical to the statement of work in the June 5, 2009 solicitation.
188.
In January 2010, the second solicitation was indefinitely postponed.
41
189.
On May 25,2010, NSW Group 1 cancelled the November 19,2009 solicitation
and released a third solicitation for combatives training.
190.
The May 25,2010 solicitation is substantially the same as the November 19, 2009
and June 5,2009 solicitations. In fact, the statement of work in the May 25,2010 solicitation is
identical to the statement of work for the November 19,2009 and June 5, 2009 solicitations.
191.
However, the May 25,2010 solicitation issued by LOGSU stated that the contract
awardee would not be able to maintain any intellectual property rights if awarded the contract.
192.
Upon information and belief, Linxx and Cucci have no intellectual property rights
in their MMA-based combatives training courses.
193.
Because Relator sought to keep the components of CQD trademark and copyright
protected, he was unable to submit a bid for CQD to compete for the 2010 contract.
194.
In January 2011, LCDR Christopher Auger, NSW Advanced Training Command
Operations Officerand Contracting OfficerTechnical Representative informed Relator that
changes were made to the intellectual property requirements in the combatives solicitations to
"appease naysayers of CQD."
195.
Accordingly, Relator alleges that the 2010 solicitation was drafted so as to
exclude CQD from competition.
F.
Linxx's Contract Awards Violate the FCA.
1.
Linxx Fraudulently Induced a Sole Source Award for Combatives
Training.
196.
Based on NSW's longstanding history of contracting for CQD training for the
SEAL Teams because CQD provides the SEAL Teams operational training skills that MMA-
based combatives training does not offer, and because Admiral Winters openly stated that no
NSW funds were to be spent on hobbyist or sport training, Linxx knew that the Government
42
intended to contract for operational training courses when it entered contracts with Linxx to train
SEAL Team Six, NSW Group 2, NSW Group 1 (under Solicitation Number H92240-08-T-
TR07), and various other Navy divisions.
197.
Linxx offers non-operational MMA-based combatives training.
198.
Accordingly, Linxx entered into contracts to train SEAL Team Six, NSW Group
2, NSW Group 1 (under Solicitation Number H92240-08-T-TR07), and various other Navy
divisions knowing that the Government intended to contract for operational training skills, and
with no intention of actually providing such operational training skills because Linxx offered
only non-operational MMA-based combatives training.
2.
Linxx Failed to Disclose a Biased Ground Rules OCI Resulting from the
Relationship between Szymanski and Cucci.
199.
Government contractors are required to comply with the Federal Acquisition
Regulations ("FAR"). Under FAR Subpart 9.5, Organizational and Consultant Conflicts of
Interest, any person proposing to enter into a contract for services to provide the Government
with all information necessary to disclose conflicts of interest, address those conflicts, and
provide a Mitigation Plan, if necessary.
200.
FAR Subpart 9.5 is intended to prevent the existence of conflicting roles that
might bias a contractor's judgment and prevent unfair competitive advantage with respect to
proprietary information obtained without proper authorization or source selection information
that might assist a contractor obtain a contract.
201.
The United States Government Accountability Office ("GAO"), through its
protest decisions, has addressed the types of OCIs and provided a framework for analysis. The
GAO identifies three types of OCIs: (1) impaired objectivity; (2) unequal access to information;
43
and, (3) biased ground rules. See Aetna Gov't Health Plans, Inc.; Foundation Health Fed.
Servs., Inc., B-254397.15, et al., July 27, 1995,95-2 CPD U 129, at 12-13.
202.
At issue here is a strong personal relationship between Cucci and Szymanski.
203.
Szymanski opposes CQD, and as stated above, has demonstrated his opposition in
many ways.
204.
Because of his strong personal relationship with Cucci, and because he opposes
CQD, Szymanski, acting on behalf of Linxx, used his position as a SEAL Team officer to
degrade CQD's reputation and training program within the SEAL Teams and to promote Linxx's
MMA-based combatives training. This favors Linxx because Linxx provides only MMA-based
combatives training, and excludes CQD, which does not provide MMA-based combatives
training but provides operational training.
205.
Further, while acting on behalf of Linxx, Szymanski caused a solicitation to issue
that would not allow offerors to protect their intellectual property rights. This solicitation
favored Linxx because Linxx has no intellectual property rights in MMA-based combatives
training, and disfavored Relator because Relator has intellectual property rights in CQD.
206.
The actions taken by Szymanski, to the financial benefit of his close personal
friend, Cucci, present a biased ground rules OCI that should have been disclosed by Cucci and
by Linxx during the proposal process.
207.
Solicitation Number H92240-08-T-TR07 does not expressly direct bidders to
FAR Subpart 9.5. However, even if a contract does not expressly state that a contractor must
certify that it has no OCIs, as defined by FAR Subpart 9.5, the contractor impliedly makes such a
certification by submitting a contract proposal that fails to identify known OCIs. See United
States v. SAIC, 555 F. Supp. 2d 40, 51 (D.D.C. 2008) ("[T]here can be little doubt that [a]
44
government contractor's failure to disclose an organizational conflict of interest constitutes a
false claim under the False Claims Act.") (internal quotation omitted), vacated on other grounds
by626 F.3d 1257;see also NFKEng'g, Inc. v. United States & Weidlinger Assocs., 805 F.2d
372, 378 (Fed. Cir. 1986) (upholding the decision to disqualify a contractor for the appearance of
impropriety); Arinc Eng'gServs., LLC v. United States & BAESys. Analytical Solutions, Inc., 77
Fed. CI. 196, 203 (Fed. CI. 2007) (stating that "the contracting officer must avoid and address
not only actual, but apparent conflicts of interest").
208.
Moreover, the failure of the contracting officer to include a fundamental contract
provision that is essential to the integrity of the procurement process does not alleviate offerors
and contractors from complying with its terms. See G.L. Christian &Assocs. v. United States,
312 F.2d 418 (Ct. CI. 1963); see also S.J. Amoroso Constr. Co., Inc. v. United States, 12 F.3d
1075 (Fed. Cir. 1993) (applying the Christian Doctrine and stating that a "mandatory contract
clause that expresses a significant or deeply ingrained strand of public procurement policy is
considered to be included in a contract by operation of law") (emphasis added).
209.
Finally, Linxx's failure to disclose Cucci's relationship with Szymanski when it
submitted bids for contracts to teach SEAL Team Six, NSW Group 2, and for Solicitation
Number H92240-08-T-TR07, and for various other Navy divisions,, and the efforts Szymanski
took in furtherance of the agreement to remove CQD from NSW and to replace CQD with
Linxx, deprived the contracting officer of material information related to the ultimate contracts.
In fact, the failure of Cucci to disclose the OCI at the solicitation stage deprived the Government
from inserting an OCI provision into the resulting contracts and ensuring no continuing OCI
existed. Therefore, the mere lack of an OCI provision does not relieve the offeror/contractor
from liability and does not make a biased ground rules OCI acceptable.
45
210.
Accordingly, Relator alleges that Linxx impliedly certified- falsely - that it had
no OCIs when it submitted bids for contracts to teach SEAL Team Six, NSW Group 2, and for
Solicitation Number H92240-08-T-TR07.
3.
Linxx Failed to Disclose a Personal Conflict of Interest Resulting from the
Relationship Between Szymanski and Cucci.
211.
Relator alleges that Cucci and Linxx were aware of Szymanski's key role in
awarding contracts to Linxx, including at least one sole source contract, and that he did so
despite the conflict of interest created by his close personal relationship with Cucci, i.e.,
Szymanski's personal interest in promoting Linxx conflicted with his duty to provide impartial
advice to the Navy. Contracts tainted by such a personal conflict of interest are void, undermine
the integrity of the procurement system, and are inconsistentwith the Government's obligation to
treat all potential contractors fairly and equally. Accordingly, Relator alleges that Linxx falsely
certified that it was entitled to be paid for the work that it performed for the Navy SEAL Teams.
Count One: False or Fraudulent Claims in Violation of 31 U.S.C. § 3729(aM 1)(A)
(Against Linxx)
212.
Relator realleges and reincorporates Paragraphs 1 through 211 as though fully set
forth herein.
213.
Defendant Linxx knowingly presented, or caused to be presented, to an officer or
employee of the United States Government, false or fraudulent records, claims, bills, invoices,
and/or statements for payment or approval, in violation of the False Claims Act, 31 U.S.C. §
3729(a)(1). Specifically, Szymanski, acting on behalf of or as Linxx's agent, actively deceived
the Government into believing that Linxx's MMA-based combatives training was operational,
when it is not in fact operational. Linxx submitted records, claims, bills, invoices, and/or
statements to the Navy for payment under contracts with SEAL Team Six, NSW Group 2, NSW
46
Group 1 (under Solicitation Number H92240-08-T-TR07), and various other Navy divisions, for
services rendered relating to MMA-based combatives training, despite explicit knowledge that
the Government intended to contract for operational training skills, and that the MMA-based
combatives training which it provided is not operational.
214.
Had the United States Government known that Linxx provided only MMA-based
combatives training, and that such training did not offer operational skills, the United States
Government would not have awarded Linxx contracts to train the Navy SEALs. Accordingly,
Linxx's misrepresentation with respect to the provision of operational training was material to
the Government's decision to award the contracts.
215.
Because of Linxx's acts (certifying that no OCIs existed) and the injury to the
integrity of the procurement process, the Government sustained damages equal to the amount of
the contracts.
216.
Because Linxx's acts were fraudulent, such damages should be trebled pursuant to
31 U.S.C. § 3729(a)(1).
Count Two: False or Fraudulent Claims in Violation of 31 U.S.C. S 3729(a)(1)(A)
(Against Linxx)
217.
forth herein.
218.
and/or statements for payment or approval, in violation of the False Claims Act, 31 U.S.C.
§ 3729(a)(1). Specifically, Linxx submitted records, claims, bills, invoices, and/or statements to
the Navy for payment under contracts with SEAL Team Six, NSW Group 2, NSW Group 1
47
(under Solicitation Number H92240-08-T-TR07), and various other Navy divisions, without
disclosing the existence of an OCI arising from Cucci's relationship with Szymanski.
219.
Had the United States Government known about the close personal relationship
between Cucci and Szymanski, which resulted in the construction of Solicitation Number
H92240-08-T-TR07 in a manner to benefit Linxx and deprive the Government of the services it
believed it was purchasing, the United States Government would not have awarded Linxx
contracts to train the Navy SEALs. Indeed, this relationship amounted to a biased ground rules
OCI. Accordingly, the existence of this OCI resulted in a procurement skewed in favor of one
offeror over another, and was material to the Government's decision to award the contracts.
220.
Because of Linxx's acts (certifying that no OCIs existed) and the injury to the
integrity of the procurement process, the Government sustained damages equal to the amount of
the contracts.
221.
31 U.S.C. § 3729(a)(1).
Count Three: False or Fraudulent Claims in Violation of 31 U.S.C. S 3729(a)(1)(A)
(Against Linxx)
222.
forth herein.
223.
and/or statements for payment or approval, in violation of the False Claims Act, 31 U.S.C.
§ 3729(a)(1). Specifically, Linxx submitted records, claims, bills, invoices, and/or statements to
the Navy for payment under contracts with SEAL Team Six, NSW Group 2, NSW Group 1
(under Solicitation Number H92240-08-T-TR07) and various other Navy divisions, without
48
disclosing the existence of Szymanski's PCI. Linxx was aware of and benefitted from
Szymanski's PCI because it received contracts, including at least one sole source contract, that
were tailored to Linxx's MMA-based combatives training. In addition, the Government was
defrauded because it did not receive the training for which it contracted.
224.
Szymanski's PCI is material because his position with the Navy allowed him to
direct and position certain contracts toward his close friend Cucci's business, Linxx.
225.
Had the United States Government known about Szymanski's close personal
relationship with Cucci and Linxx (i.e., his PCI), the United States Government would not have
awarded Linxx contracts to train the Navy SEALs.
226.
Because of Linxx's acts (failing to disclose a known PCI) and the material injury
to the integrity of the procurement process, the Government sustained damages equal to the
amount of the contracts.
227.
31 U.S.C. § 3729(a)(1).
Count Four: Conspiracy to Defraud the Government by Knowingly Presenting
or Causing to be Presented a False or Fraudulent Claim for Payment
in Violation of 31 U.S.C. S 3739(a)(1)(C)
(Against Defendants Linxx and Cucci)
228.
Relator realleges Paragraphs 1 through 211 as though fully set forth herein.
229.
Through the acts described above and otherwise, Defendants entered into a
conspiracy or conspiracies among themselves and with others to defraud the United States by
getting false and fraudulent claims allowed or paid. Defendants have also conspired to omit
disclosing or to actively conceal facts which, if known, would have reduced Government
obligations to them or resulted in repayments from them to the Government. Defendants have
taken substantial steps in furtherance of those conspiracies, inter alia, by knowingly presenting,
49
or causing to be presented, false or fraudulent records, claims, bills, invoices, and/or statements
to the Navy for payment under contracts with SEAL Team Six, NSW Group 2, NSW Group 1
(under Solicitation Number H92240-08-T-TR07), and with various other Navy divisions, and by
directing their agents, employees, and/or co-conspirators not to disclose and/or to conceal
Defendants' fraudulent practices.
230.
The United States, unaware of Defendants' conspiracies or the falsity of the
records, claims, bills, invoices, and/or statements made by Defendants and their agents,
employees, and/or co-conspirators, and as a result thereof, has paid and continues to pay monies
that it would not otherwise have paid.
231.
By reason of Defendants' conspiracies and the acts taken in furtherance thereof,
and the injury to the integrity of the procurement process, the Government sustained damages
equal to the amount of the contracts.
232.
31 U.S.C. § 3729(a)(1).
Count Five: Fraudulent Inducement
(Against Linxx and Cucci)
233.
Relator realleges and reincorporates by reference Paragraphs 1 to 211 as though
fully set forth herein.
234.
Linxx and Cucci represented to the Government that the MMA-based combatives
training courses Cucci teaches at Linxx meet the Government's requirements for operational
combatives training.
235.
Linxx and Cucci made this representation to the Government for the purpose of
procuring contracts to teach MMA-based combatives training courses to the SEAL Teams.
50
236.
Linxx and Cucci know that MMA is not operational. Therefore, Linxx and Cucci
know that the MMA-based combatives courses Cucci teaches through Linxx do not meet the
Government's requirements for operational combatives training.
237.
Linxx's and Cucci's representation to the Government was material to the
Government's decision to award Linxx contracts. Had the United States known that the MMA-
based combatives training provided by Cucci and Linxx was not operational, the United States
would not have entered into contracts with Linxx for MMA-based combatives training.
238.
The United States relied upon Linxx's and Cucci's representation that the MMA-
based combatives training courses Cucci teaches through Linxx meet the Government's
requirements for operational combatives training.
239.
By reason of Linxx's and Cucci's misrepresentations, Linxx and Cucci
fraudulently induced the Government into entering into contracts, including at least one sole
source contract, with Linxx to provide MMA-basedcombatives training to the SEAL Teams.
240.
By reason of Linxx's and Cucci's fraudulent inducement, the Government
sustained damages equal to the amount of the contracts.
Count Six: Unjust Enrichment
(Against Linxx and Cucci)
241.
Relator realleges and reincorporates by reference Paragraphs 1 to 211 as though
fully set forth herein.
242.
By reason of the foregoing conduct, Defendants Linxx and Cucci were unjustly
enriched at the expense of the United States in an amount to be proven at trial.
243.
In equity and good conscience, the money should be returned to the United States.
51
Prayer for Relief
WHEREFORE, Relator, on behalf of the United States, demands judgment against
Defendants as follows:
A.
Under Counts One, Two, Three, and Four (FCA), a sum equal to three times the
amount of damages the United States has sustained, including investigativecosts, plus such civil
penalties as are allowable by laws; or,
B.
Under Count Five (Fraudulent Inducement), a sum equal to the amount of the
contracts into which the United States entered;
C.
Under Count Six (Unjust Enrichment), a sum equal to the amount by which
Defendants were unjustly enriched, plus interest and costs; and,
D.
Such other relief as this Court may deem just and proper, together with interests
and costs of this action.
52
JURY DEMAND
Pursuant to Federal Rule of Civil Procedure 38(b)(1), Relator demands trial by jury of all
issues triable as of right to a jury.
Respectfully submitted,
Dated: October 12,2011
J.T3ouglas Baldridge, Virginia Bar No. 34*327
Molly T. Geissenhainer, Virginia Bar No. 78508
Venable LLP
575 7th Street, NW
Washington, DC 20004-1601
(202) 344-4000 (phone)
(202) 344-8300 (fax)
jdbaldridge@venable.com
tjmadden@venable.com
dlocaria@venable.com
mtgeissenhainer@venable.com
Counselfor Relator Duane P. Dieter
53

2011 OCT 12 P 2: 31

Transcription

Similar documents

THE CARE AND HANDLING OF LEOPARD SEALS (HYDRURGA

SIMPLAN Shaft Seals for Water Lubricated Sterntubes

Palmersnorus

Steel City Sound invitation e-flyer

Pagewood Public School Newsletter

Section 7 - Saint

A guide to dismantling the Theoben H.E. Gas Ram

BOOLAROO PUBLIC SCHOOL BOOLAROO PUBLIC SCHOOL You

Term 4 Week 6B 13 November 2015 PRINCIPAL`S REPORT