A federal appeals court on Friday reinstated a lawsuit by a former ConAgra employee who accused the company of falsifying export documents that cheated the U.S. government out of hundreds of millions of dollars.
A federal judge in Denver dismissed the whistle-blower case in 2004. But the U.S. Court of Appeals for the 10th Circuit rescinded that decision and kicked the case back, reopening the door to a potential payday that lawyers say could reach $250 million.
The law requires the federal government to get 70 percent of any amount collected.
Ali Bahrani, 51, formerly of Fort Collins and now living in Indiana, sued ConAgra in May 2000 in Denver federal court charging the company with routinely altering federal documents required to export beef hides and meat to Southeast Asia.
By changing key information on the documents instead of paying for new ones, as federal law requires, the company allegedly shorted the government with each change.
ConAgra, which sold its Greeley-based beef operations in 2002 to Swift & Co., has denied it did anything wrong. ConAgra maintains changes to documents were minor and permitted by the U.S. Department of Agriculture, which regulates the industry.
The employee can collect three times the amount the government was cheated, and each violation can be assessed up to $10,000 in fines. If ultimately successful, Bahrani could pocket millions of dollars, his attorney, George Parker, said Friday.
“I figure the total amount will be at least $250 million,” Parker said. Bahrani and his attorneys would get 30 percent.
Attorneys for ConAgra were not immediately available late Friday for comment.
Bahrani alleged that ConAgra employees altered more than 200 export certificates a week in the company’s hides export division. Bahrani worked there from June 1996 to August 1998. The practice had been ongoing since at least 1990, according to the lawsuit.
Export certificates are necessary to transport meat and hides to foreign countries and contain information such as country of destination, size of the shipment, name of the vessel and quality of the product.
Whenever ConAgra employees discovered errors or omissions on the certificates, they routinely altered the originals or forged new ones rather than obtain necessary USDA replacements, according to the lawsuit.
Each reissued certificate costs $21.50, but ConAgra didn’t pay it because employees didn’t apply for them, Bahrani alleged.
The appellate court ruled that U.S. District Judge John Kane erred by dismissing the case in October 2004.
Kane ruled the changes to the certificates were incidental and didn’t fall under the whistle- blower laws Bahrani was using to sue.
Staff writer David Migoya can be reached at 303-954-1506 or dmigoya@denverpost.com.
