state a claim upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6).
When considering a Rule 12(b)(6) motion to dismiss, a court should not grant the motion unless the plaintiff can prove no set of facts in support of its claim which would entitle it to relief. Schuler v. United States, 199 U.S. App. D.C. 23, 617 F.2d 605, 608 (D.C. Cir. 1979) (citing Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 101-02, 2 L. Ed. 2d 80 (1957)), vacated on other grounds, 628 F.2d 199 (D.C. Cir. 1980) (en banc). The complaint is construed liberally in the plaintiff's favor, and a court should give the plaintiff the "benefit of all inferences that can be derived from the facts as alleged." Id. However, the facts must be sufficiently described in the complaint to allow the court to draw such inferences. See Papasan v. Allain, 478 U.S. 265, 106 S. Ct. 2932, 2944, 92 L. Ed. 2d 209 (1986).
Counts One and Two
Counts One and Two allege that Harbour violated the False Claims Act by knowingly causing false or fraudulent claims and records to be made or presented to the United States. 31 U.S.C. §§ 3729(a)(1) and (2). To establish either of these claims under § 3729(a), the government must show: (1) the existence of a request for payment, and (2) that this request was fraudulent. See United States ex rel. Glass v. Medtronic, 957 F.2d 605, 608 (8th Cir. 1992). Here, the complaint alleges that 12 monthly invoices totalling $ 150,000 were presented to the government, thus satisfying the first element.
To fulfill the second criterion, a fraudulent request for payment, the complaint must allege the supporting facts with a higher degree of particularity. See Fed. R. Civ. P. 9(b). A sufficient claim for fraud under Rule 9(b) must state the time, place, and content of the false misrepresentations, the fact misrepresented, and what was retained or given up as a consequence of the fraud. Kowal v. MCI Communications Corp., 305 U.S. App. D.C. 60, 16 F.3d 1271, 1278 (D.C. Cir. 1994). The claim also must state which individual made the misrepresentation. See United States ex rel. Joseph v. Cannon, 206 U.S. App. D.C. 405, 642 F.2d 1373, 1385 (D.C. Cir. 1981), cert. denied, 455 U.S. 999, 102 S. Ct. 1630, 71 L. Ed. 2d 865 (1982).
Here, the complaint alleges that Harbour and his two co-defendants executed their scheme to defraud the government beginning in early 1988 and continuing until May of 1990. The complaint identifies Washington, D.C., as the location where invoices and payments integral to the alleged scheme were processed. Finally, the complaint contends that these invoices resulted in overcharges of $ 120,000 that were paid to Ricche and divided among the other two defendants. Based on these facts and the inferences that may be derived from them, the Court finds that Counts One and Two have been pleaded with sufficient particularity.
Count Three alleges that Harbour violated the False Claims Act by conspiring to make or present false or fraudulent claims for payment to the United States. 31 U.S.C. § 3729(a)(3). To state a claim under § 3729(a)(3), the government must show: (1) that defendant conspired with one or more persons to have a fraudulent claim paid by the United States, (2) that one or more of the conspirators performed any act to have such a claim paid by the United States, and (3) that the United States suffered damages as a result of the claim. See, e.g., United States ex rel. Stinson, Lyons, Gerlin & Bustamante, PA v. Provident Life & Accident Ins. Co., 721 F. Supp. 1247, 1259 (S.D. Fla. 1989) (citing Blusal Meats, Inc. v. United States, 638 F. Supp. 824, 828 (S.D.N.Y. 1986), aff'd, 817 F.2d 1007 (2d Cir. 1987)).
The complaint alleges that Harbour conspired with Ricche and Bouchey to collect deliberately inflated payments for consulting services from the United States.
It also describes in detail the actions allegedly undertaken by the conspirators to ensure that the consulting services would be included in Capital Bank's budget. Lastly, the complaint contains specific allegations that it suffered damages of approximately $ 120,000 as a result of paying for consulting services it contends were worth only $ 30,000. These facts, accepted as truthful at this stage of the litigation, sufficiently support a claim for relief pursuant to § 1329(a)(3).
Count Four alleges that Harbour and his co-defendants made misrepresentations of material fact in causing the United States to be billed for the consulting services performed by Gudricch & Peers. The government seeks to recover these funds as well as interest and other costs pursuant to its common law right to reclaim funds which its agents have wrongfully, erroneously, or illegally paid. See, e.g., Bell v. New Jersey & Pennsylvania, 461 U.S. 773, 103 S. Ct. 2187, 2193 n.7, 76 L. Ed. 2d 312 (1983); United States v. Wurts, 303 U.S. 414, 58 S. Ct. 637, 638, 82 L. Ed. 932 (1938). The complaint alleges that Harbour participated in a conspiracy through which its funds were erroneously paid to other members of the conspiracy. The complaint alleges sufficient facts to support a claim for relief under this theory.
The government alleges that as a result of the alleged conspiracy to charge inflated rates for Gudricch & Peers's consulting services, Harbour was unjustly enriched to the detriment of the United States. To state a claim for unjust enrichment, a plaintiff must establish that: (1) plaintiff conferred a benefit upon the defendant; (2) the defendant possessed an appreciation or knowledge of the benefit; and (3) the defendant accepted or retained the benefit under such circumstances "as to make it inequitable for the defendant to retain the benefit without payment of its value." International Bhd. of Teamsters v. Association of Flight Attendants, AFL-CIO, 663 F. Supp. 847, 854 (D.D.C. 1987).
The government alleges in its complaint that Harbour knowingly received a sum of money for his approval of the Capital Bank budget. Moreover, the circumstances surrounding this payment are sufficient for the Court to infer that Harbour's retention of these funds would result in an outcome that is inequitable to the government. For these reasons, the Court finds that the government has stated sufficient facts to support its claim of unjust enrichment.
Count Six alleges that Harbour's involvement in the alleged conspiracy and his review and processing of Capital Bank's second annual administrative budget constituted a conflict of interest under 18 U.S.C. § 208, for which Harbour is liable for a civil penalty to the United States pursuant to 18 U.S.C. § 216(b). An employee of the executive branch violates section 208 if he participates personally and substantially as a government officer or employee in a matter in which, to his knowledge, he has a personal financial interest. 18 U.S.C. § 208. The complaint alleges that Harbour was part of a conspiracy that provided for Harbour to be compensated for approving the budget and that the conspiracy was formed prior to the time Harbour approved the budget. These allegations and the inferences to be drawn therefrom are sufficient to support a claim under § 208.
Upon consideration of the foregoing, it hereby is
ORDERED, that defendant Harbour's motions to dismiss the complaint and amended complaint are denied.
Stanley S. Harris
United States District Judge
Date: AUG 23 1994