Melan Davis, who was responsible for pulling together travel expenses to submit to the State Department, had direct knowledge of the fraud because she participated in it herself, Burke said. Court papers allege the company overbilled the government by more than $123 million in labor and travel expenses, though a judge precluded the Davises from sharing that estimate with the jury after defense lawyers challenged it.

Continue reading

Melan Davis was the first witness. Asked by her attorney why she was there, she replied, "Myself, along with others, committed fraud."

U.S. District Judge T.S. Ellis III has already dismissed several of the lawsuit's claims, including a salacious allegation that Blackwater billed the government for prostitutes. The judge said there was no evidence that Blackwater sought out prostitutes.

Ellis also struck a claim that Blackwater overbilled on a security contract it was awarded in Louisiana in the aftermath of Hurricane Katrina.

O'Brien, the company's lawyer, said Blackwater had not engaged in fraudulent billing and that he would call State Department officials as witnesses to vouch for the company. He showed jurors emails between Melan Davis and Blackwater management discussing the importance of accurate billing and accounting.

"No one ever told them to falsify any documents — nor would they have falsified any documents," he said.

He also said the State Department was more concerned with having the appropriate number of independent contractors in Iraq and Afghanistan than it was with the specific dates of travel listed on records.

The trial is expected to last about two weeks.

The Davises' lawsuit is one of several legal skirmishes Blackwater has fought following its contract work. A lawsuit unsealed this month from a current and former employee also accuses Blackwater of overbilling the government for work protecting State Department employees in Iraq and Afghanistan.

Blackwater founder Erik Prince was dismissed as a defendant last month. The lawsuit names as a defendant the U.S. Training Center, a business unit of the former Blackwater.