1

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 20-81063-CIV-SMITH

STEVE HARTEL, Individually and on Behalf 

of All Others Similarly Situated, 

Plaintiff, 

v.

THE GEO GROUP, INC. and GEORGE C. 

ZOLEY, 

Defendants.

CONSOLIDATED CLASS ACTION 

SECOND AMENDED COMPLAINT

JURY TRIAL DEMANDED

Lead Plaintiffs James Michael DeLoach (“DeLoach”) and Edward Oketola (“Oketola”) 

(together, “Lead Plaintiffs”), individually and on behalf of all others similarly situated hereby bring 

this Consolidated Class Action Second Amended Complaint (the “Complaint”) against The GEO

Group, Inc. (“GEO” or the “Company”) and George C. Zoley (“Zoley”) (collectively, 

“Defendants”). The allegations herein are based on Lead Plaintiffs’ personal knowledge as to their 

own acts and on information and belief as to all other matters, such information and belief having 

been informed by the investigation conducted by and under the supervision of counsel, which 

includes a review of: U.S. Securities and Exchange Commission (“SEC”) filings by GEO; 

securities analysts’ reports and advisories about the Company; press releases and other public 

statements issued by the Company; and media reports about the Company. Counsel’s investigation 

into the matters alleged herein is ongoing and many relevant facts are known only to Defendants 

or are exclusively within their custody or control. Lead Plaintiffs’ investigation indicates 

substantial additional evidentiary support will exist for the allegations set forth herein after a 

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reasonable opportunity for discovery.

I. NATURE OF THE ACTION

1. This is a federal securities class action on behalf of all persons and entities who 

purchased or otherwise acquired GEO common stock during the period from November 9, 2018 

to August 5, 2020, inclusive (the “Class Period”), and were damaged thereby. The action is brought 

against GEO and Zoley for violations of the Securities Exchange Act of 1934 (the “Exchange 

Act”) and SEC Rule 10b-5 promulgated thereunder.

2. Founded in 1984, GEO is purportedly the first fully integrated equity real estate 

investment trust (“REIT”) specializing in the design, financing, development, and operation of 

secure facilities, processing centers, and community reentry centers. It operates internationally, 

with over 127 facilities in the U.S., Australia, South Africa, and the United Kingdom. GEO is also 

purportedly a leading provider of enhanced in-custody rehabilitation, post-release support, 

electronic monitoring, and community-based programs. The Company’s worldwide operations 

include the ownership and/or management of, among other facilities, private prisons, detention 

centers and halfway houses in the U.S. Simply put, GEO is a leader in the private prison business.

3. At the time GEO restructured to become a REIT in 2013, there was significant 

room to grow because the U.S. had the largest prison population in the world and private prisons 

represented less than 10% of a $74 billion market. But the private prison model has always had 

critics and controversies, including public outcry about how inmates were treated and accusations 

that the government guaranteed high occupancy rates when it awarded a contract. In addition, 

historically, the profitability of private prisons decreased in recessions with fewer arrests made 

and when changes in governments disfavored private prisons.

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4. After becoming a REIT, GEO was required to distribute at least 90% of its income 

each year as dividends to shareholders. That structure has allowed GEO to avoid corporate-level

taxation, because its shareholders are taxed on the dividends. As a consequence, GEO has had 

limited funds with which to run its operations and has had to rely on the capital markets to fund 

growth investments. Accordingly, GEO’s continued success—as well as that of peer companies, 

like CoreCivic, Inc. (“CoreCivic”)—depended on lucrative financing deals with large banks like 

JPMorgan Chase Co. (“JPMorgan”), Wells Fargo & Company (“WF”), and Bank of America 

Corporation (“BofA”), on top of maintaining stable, revenue-generating contracts with federal, 

state, and local governments. Those financing deals and government contracts, in turn, required 

GEO to comply with a host of regulatory requirements while maintaining standards of due process 

and human rights.

5. A key signal to investors that GEO was in fact successfully operating its facilities 

and obtaining sufficient capital from lenders was a stable, predictable dividend. In order for GEO 

to sustain or increase its stock price or dividend levels, it was critical that the Company maintain 

and operate an increasing number of profitable prisons and detention facilities that were also safe, 

effective, and legally-compliant. A stable dividend reflected solid business performance and 

ensured that GEO’s stock price maintained or increased in value.

6. Going into the Class Period, JPMorgan was far and away the largest lender to 

private prison behemoths GEO and CoreCivic, holding $254 million of their debt as of June 2017.1

WF and BofA also provided revolving credit, term loans, and bond underwriting to GEO (and 

CoreCivic), helping them fund facility construction and general operations. But in 2018 while 

1 Morgan Simon, In Wake of Wells Fargo Hearing, Private Prison Stocks Take Big Hit, FORBES MEDIA 

LLC, (Mar. 15, 2019), https://www.forbes.com/sites/morgansimon/2019/03/15/in-wake-of-wells-fargohearing-private-prison- stocks-take-big-hit/?sh=b9ff3e71a3b5.

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JPMorgan, BofA, and WF raised over $1.8 billion in debt for GEO and CoreCivic, activists who 

had long been campaigning the banks to stop funding the private prison industry gained

momentum after the Trump administration adopted the Zero Tolerance Policy on immigration in 

April 2018. 

7. The concomitant scrutiny on GEO was substantial. For example, the activism 

prompted the Teachers’ Retirement Board of the California State Teachers’ Retirement System 

(“CalSTRS”) to conduct a 5-month investigation beginning in July 2018 involving visits to GEO’s 

detention facilities and meetings with senior management. CalSTRS ultimately divested all of its 

holdings in GEO. At the same time, GEO was facing multiple class actions that posed “a 

potentially catastrophic risk to GEO’s ability to honor its contracts with the federal government” 

and to continue receiving revenue from those facilities. Indeed, Defendant Zoley indicated to U.S. 

Immigration and Customs Enforcement (“ICE”) that he was “deeply alarmed” about the “tens of 

millions” in potential damage exposure and the “rapidly increasing” expenses to defend the 

lawsuits, estimating in May 2018 that the cost could be as much as $20 million. That considerable 

financial exposure would erode GEO’s net income, which in 1Q18, for example, had been only

$34.9 million. In other words, the amount of liability faced by GEO could immediately eradicate 

57% of GEO’s quarterly profit. Defendant Zoley was right to be “deeply alarmed.” There was an 

existential threat to GEO’s profitability and dividends. Worse yet, the pressures and exposure that 

GEO faced as of May 2018 were growing more severe.

8. Yet, throughout the Class Period, Defendants did not reveal those fundamental 

facts to investors and instead misrepresented GEO’s stability and publicly portrayed the company 

in a materially misleading light. In November 2018, when the Class Period begins, Defendants 

maintained the appearance of business as usual, i.e., that their financing deals with big banks and 

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contracts with governments would continue as a matter of course. On November 7, 2018 and

February 14, 2019, Defendants touted that GEO’s dividend continued to be supported by stable

and “predictable operational cash flows.”

2 Defendants also confirmed the Company’s liquidity of 

$374 million on November 7, 2018 and $350 million on February 14, 2019 “in available capacity 

under our revolving credit facility in addition to and accordion feature of $450 million under our 

credit facility.”

9. Further, on November 7, 2018, while acknowledging the results of the mid-term 

elections that resulted in a Democratically controlled House of Representatives (a party historically 

opposed to private prisons), Defendant Zoley reminded investors of GEO’s “three-decade-long 

record in providing high-quality services under both Democratic and Republican administrations 

at the federal and state levels” and assured them that GEO has “consistently helped our government 

partners meet their correctional and detention challenges with the development and operation of 

state-of-the-art facilities providing services in safe, secure and humane environments,” noting that 

its “facilities are under constant operational scrutiny by onsite government monitors and special 

inspections by government agencies and third-party accrediting organizations.” In truth, GEO was 

facing increased scrutiny from its lenders about its ability to continue to be profitable under the 

increasingly charged political climate.

10. But after the market opened on March 5, 2019, the truth began leaking out that 

GEO’s financing relationships had cracked under the intense public and political scrutiny, thereby 

limiting GEO’s access to capital. That day, Bloomberg published an article entitled “JPMorgan 

Ends Financing of Private Prisons After Criticism” and Reuters reported that “JPMorgan Chase & 

Co has decided to stop financing private operators of prisons and detention centers, which have 

2 Unless otherwise noted, internal citations are omitted, and emphasis is added throughout.

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become targets of protests over Trump administration policies.” Then, on March 10, U.S. Bank 

announced that it had reduced its credit exposure to GEO and CoreCivic to “an immaterial amount”

and on March 12, in response to New York Congresswoman Alexandra Ocasio-Cortez grilling WF 

Chief Executive Officer (“CEO”) Timothy Sloan about its financing of private prison companies 

like GEO, he responded, “[w]e will exit that relationship.” Because of these revelations—

indicating that the Company’s cashflows, operations, profits, (and therefore) dividends were no 

longer predictable or stable—GEO’s share price fell over 11% on March 8, 2019, and another 5% 

on March 14, 2019, after heavy trading. As Forbes reported the next day, “[t]he stocks of private 

prison leaders GEO Group and CoreCivic are down 16% and 8%, respectively today since last 

Tuesday — the day when the country’s largest bank, JPMorgan Chase, publicly announced that 

they will take their money out of the private prison industry[.]”

11. Despite the uncertainty of where GEO would obtain future financing when the 

public prison industry was under heightened scrutiny, Defendants continued to misleadingly assure 

investors of “the stability of our cash flows and the sustainability of our annual dividend payments” 

on April 13, 2019 and July 30, 2019. Such scrutiny increased after the U.S. Department of 

Homeland Security’s (“DHS”) internal watchdog, the Office of Inspector General (“OIG”), issued 

reports in May, June, and July 2019 revealing several detention centers, including multiple GEO 

facilities, were operating in violation of government standards and called for immediate action to 

address the substandard conditions, inadequate medical care, and overcrowding at these facilities. 

The scrutiny increased again after U.S. Senator Elizabeth Warren published her July 24, 2019 letter 

to the SEC Chairman, calling attention to “a series of misleading public statements and omissions 

of material facts by top executives of The GEO Group, Inc.” and highlighting the stark difference 

between the Company’s public statements expressing confidence in its financial position and its 

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non-public communications by corporate executives, including Defendant Zoley, regarding the 

Company’s growing financial concerns.

12. Yet Defendants denied the reporting as false and even doubled down by claiming 

that GEO was doing so well that it would be able to deleverage. Specifically, on July 30, 2019, 

Defendant Zoley addressed “the recent media stories regarding overcrowded border patrol 

facilities and financial institutions discontinuing future financial support for private operators of 

ICE Processing Centers,” unequivocally debunking them as being “driven by a false narrative and 

deliberate mischaracterization of our long-standing role as a quality service provider to ICE.” He 

further assured investors that GEO’s “growing earnings will allow us to naturally deleverage, 

while providing support for our annual dividend payments, which we expect to remain 

unchanged.”

13. That same day, the New York Times ran a story entitled “Edelman, Public 

Relations Giant, Drops Client Over Border Detention Centers.”3 The Times reported that “GEO 

Group . . . was being battered by negative media attention in the uproar over reports that the United 

States was separating migrant children from their parents at the Mexican border. Lawmakers were 

demanding access to detention facilities.” According to “several employees” Edelman dropped 

GEO as a client because GEO’s reputation was so bad, Edelman was concerned its own reputation 

would be stained by any affiliation with GEO. See id. Defendant Zoley did not respond to the 

Times request for an interview. Id.

3 Tiffany Hsu, Edelman, Public Relations Giant, Drops Client Over Border Detention Centers, THE NY

TIMES, , (July 20, 2019), https://www.nytimes.com/2019/07/30/business/edelman-geo-borderdetention.html#:~:text=In%20a%20statement%20to%20The,clients%2C%E2%80%9D%20the%20statem

ent%20said.&text=Edelman%20has%20touted%20its%20strong,tobacco%2C%20coal%20or%20firearm

s%20businesses (last visited Nov. 17, 2020).

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14. By early August 2019, eight banks – including JPMorgan, BofA, WF, SunTrust 

Banks, Inc. (“SunTrust”), BNP Paribas SA (“BNP”), Fifth Third Bancorp (“Fifth Third”), Barclays 

Plc (“Barclays”) and PNC Bank (“PNC) – said they would no longer lend to private prisons,

including GEO (and CoreCivic). Together, these eight banks represented an estimated $2.35 

billion, or 87.4%, of the credit lines and term loans that previously had been available to GEO and 

CoreCivic to fund their operations and growth. Notably, there were no other banks which had a 

public-disclosed financing relationship with GEO. Then, in October 2019, California Governor 

Gavin Newsom signed a bill committing “not to enter into a contract with a private, for profit 

prison facility located in or outside the state.”4

15. Despite these mounting pressures, on November 5, 2019, Defendants once again 

assured investors that the intense scrutiny was not impacting GEO’s cash flows or dividend levels. 

Defendant Zoley specifically reiterated that “this volatility has been driven by a false narrative and 

deliberate mischaracterization of our long-standing role as a quality service provider to ICE,” 

“[t]here has been a significant amount of misinformation regarding our banking partners and 

access to capital,” and “growing earnings and cash flows will allow us to deleverage while 

providing support for our annual dividend payments which we expect to remain unchanged.”

16. By 2020, GEO’s circumstances had deteriorated further. The global COVID-19 

pandemic was clearly making its way across the U.S., and GEO was wholly unequipped. GEO had 

previously failed to implement adequate preventative and safety measures to deal with infectious 

diseases in its facilities, leading to massive, lengthy outbreaks and quarantines and exposing the 

Company to numerous costly lawsuits. Yet GEO had not updated its measures and was no better 

4 California Assembly Bill 32, Detention facilities: private, for-profit administration services,

(last visited Nov. 17, 2020).

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equipped against COVID-19. The already-imminent threats to the Company’s cash flows and 

dividends would only exacerbate, particularly as political scrutiny of the prison industry continued.

However, Defendants continued concealing the truth from investors.

17. Specifically, as the COVID-19 crisis unfolded, Defendants said nothing about its

likely negative impact on the Company’s cash flows and dividend payment. Instead, on February 

12, 2020, Chief Financial Officer (“CFO”) Brian R. Evans (“Evans”) maintained that GEO 

“continue[s] to enjoy access to capital with several dozens of lenders and financial institutions” 

and its “dividend payments continue to be supported by our cash flows and earnings.” 

18. CFO Evans made this statement despite Delaware County officials commissioning 

a study in February 2020 to determine what was needed to transition Pennsylvania’s only private 

prison back to being publicly run. The contract, that GEO terminated 4 years early (and at a loss 

of 80% of expected revenue), was a five-year $259 million contract.

19. In the wake of that silence, and rising public concern over COVID-19, multiple 

senators sent a public letter to GEO on March 9, 2020 after the market closed, pressing for 

information about the policies and procedures the Company had “in place to prepare for and 

manage a potential spread of the novel coronavirus among federal prisoners in GEO’s custody and 

among correctional staff at GEO facilities.” In addition, the letter noted that “incarcerated 

individuals ‘are at special risk of infection, given their living situations.’”

20. In response to the revelation on March 9, 2020, regarding the special risk of 

COVID-19 in GEO’s facilities and on March 10 regarding GEO’s loss of a contract worth over

$200 million in future revenue, the Company’s share price plummeted over 29% after two days of 

heavy trading.

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21. Nonetheless, Defendants continued to assure investors that GEO’s cashflows and 

dividend levels would remain the same and that they were equipped for COVID-19. On April 30, 

2020, Defendants falsely or misleadingly stated that:

• “[f]rom the outset of the COVID-19 global pandemic our corporate, regional and field 

staff have implemented comprehensive steps to address and mitigate the risks of 

COVID-19 to all those in our care and our employees;”

• “[a]ll of our facilities operate safely and without overcrowded conditions;”

• “most of our facilities have had very few or no cases of COVID-19;”

• we had “implementat[ed] . . . quarantine and cohorting procedures to isolate confirmed 

and presumptive cases of COVID-19, including medical isolation and the use of 

airborne infection isolation rooms;”

• we had deployed “specialized sanitation teams to sterilize high-contact areas of our 

facilities and have developed intensive schedules and procedures for the cleaning and 

disinfecting of facility spaces above and beyond normal cleaning activities.”

22. The truth that GEO’s actual response to COVID-19 was nothing but a blundering 

disaster, and likely impacted its cashflow and dividend was revealed less than two months later. 

The Intercept published an article during pre-market hours on June 17, 2020 entitled “GEO 

Group’s Blundering Response to the Pandemic Helped Spread Coronavirus in Halfway Houses.” 

The article reported details of a significant COVID-19 outbreak at the Grossman Center, a halfway 

house operated by GEO in Leavenworth, Kansas which “was for weeks the hardest hit federal 

halfway house in the country” in terms of confirmed COVID-19 cases. Citing interviews with 

residents of the Grossman Center, The Intercept reported “that the virus spread not in spite of the 

facility’s efforts to contain it, but because of it” and that GEO’s “blundering” response included 

keeping residents in overcrowded conditions without enforcing personal protective measures even 

as COVID-19 diagnoses at the facility increased. On the same day, GEO’s peer company, 

CoreCivic (which was facing similarly disastrous results) announced the suspension of its dividend 

and a reevaluation of its “corporate structure and capital allocation alternatives.” That suspension 

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signaled to the market that, contrary to Defendants’ repeated assurances, GEO’s dividend likely 

was not secure or stable. In response to this news, GEO’s stock price fell over 10% after two days 

of heavy trading.

23. Acutely aware of its desperate need to generate some good publicity, GEO filed a 

high-profile lawsuit against Netflix in May 2020 before this very Court. See The GEO Group Inc., 

et al v. Netflix, Inc., Case No. 9:20-cv-80847-RS. The suit alleges that Netflix “defamed” GEO in

its show “Messiah” by showing GEO trademarks when exhibiting “scenes of an immigrant 

detention facility where people were being housed—day and night—in an overcrowded overheated 

room with a chain-link cage, without beds, sunshine, recreation, or educational opportunities.” Id. 

at ECF No. 38. Netflix’s motion to dismiss rightly calls GEO out for filing the suit as “a poorlyguised marketing ploy designed to whitewash real-life governmental findings of abuse.” Id. at ECF 

No. 27, at 5. In support, Netflix attached the June 2019 OIG report that found inhumane conditions 

violating ICE standards in two GEO detention centers that housed ICE detainees.

24. Defendants did not finally reveal the full truth behind their Class Period statements 

until August 6, 2020. Ultimately, the Company’s operational deficiencies and contractual and legal 

violations – highlighted by public and political scrutiny and numerous lawsuits – diminished 

GEO’s previous access to capital: the majority of its financing partners bailed, and multiple major 

government contracts were terminated, thereby eliminating GEO’s previous revenue streams. 

Those deficiencies and violations, moreover, left GEO unequipped to deal with multiple major 

COVID-19 outbreaks in GEO facilities. Those defects reduced the population and GEO’s revenue. 

Instead of disclosing the truth to investors, Defendants repeatedly assured that GEO’s dividends 

were safe and its cashflows were stable. On August 6, 2020, Defendants revealed that they would 

be reducing GEO’s quarterly dividend by nearly 30%. On this news, GEO’s stock price fell nearly 

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7% after two days of heavy trading. At the end of the Class Period, after Defendants’ series of 

revelations, the price had dropped over 55% from the Class Period high.

25. Throughout the Class Period, Defendants made materially false and misleading 

statements regarding the Company’s business. As a result of Defendants’ wrongful acts and 

omissions, and the precipitous declines in the market value of GEO’s securities, Lead Plaintiffs 

and other Class members have suffered significant losses and damages.

II. JURISDICTION AND VENUE

27. The claims asserted herein arise under §§ 10(b) and 20(a) of the Exchange Act (15

U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R. § 

240.10b-5).

28. This Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. § 1331 and § 27 of the Exchange Act (15 U.S.C. § 78aa).

29. Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391(b) and § 27 

of the Exchange Act (15 U.S.C. § 78aa(c)). Substantial acts in furtherance of the alleged fraud or 

the effects of the fraud have occurred in this Judicial District. Many of the acts charged herein, 

including the dissemination of materially false and/or misleading information, occurred in 

substantial part in this Judicial District. In addition, GEO is headquartered in this Judicial District.

30. In connection with the acts, transactions, and conduct alleged herein, Defendants 

directly and indirectly used the means and instrumentalities of interstate commerce, including the

U.S. mail, interstate telephone communications, and the facilities of a national securities exchange.

III. PARTIES

31. Lead Plaintiff DeLoach, as set forth in the accompanying certification, 

incorporated by reference herein, purchased GEO common stock during the Class Period, and 

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suffered damages as a result of the federal securities law violations and false and/or misleading 

statements and material omissions alleged herein.

32. Lead Plaintiff Oketola, as set forth in the accompanying certification, incorporated 

by reference herein, purchased GEO common stock during the Class Period, and suffered damages 

as a result of the federal securities law violations and false and/or misleading statements and 

material omissions alleged herein.

33. Defendant GEO is incorporated in Maryland and headquartered in Boca Raton, 

Florida. GEO’s common stock trades on the New York Stock Exchange (“NYSE”) under the 

symbol “GEO.”

34. Defendant Zoley serves as GEO’s Chairman of the Board and CEO. He has served 

as CEO since the Company went public in 1994 and served as Vice Chairman of the Board from

January 1997 to May of 2002. Mr. Zoley founded GEO in 1984 and served as President and 

Director from the Company’s incorporation in 1988 until it went public. He also serves as a 

director of several business subsidiaries through which GEO conducts its operations worldwide. 

Mr. Zoley has bachelor’s and master’s degrees in Public Administration from Florida Atlantic 

University and a doctorate degree in Public Administration from Nova Southeastern University.

35. Because of Defendant Zoley’s executive position, he had access to the 

undisclosed adverse information about GEO’s business, operations, operational trends, controls, 

markets, and present and future business prospects via internal corporate documents, conversations 

and connections with other corporate officers and employees, attendance at management and 

Board meetings and committees thereof.

36. Defendant Zoley was directly involved in the management and day-to-day 

operations of the Company at the highest levels and was privy to confidential proprietary 

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information concerning the Company and its business, operations, controls, growth, products and 

present and future business prospects as alleged herein. In addition, Defendant Zoley was involved 

in drafting, producing, reviewing and/or disseminating the false and/or misleading statements and 

information alleged herein, were aware of, or recklessly disregarded, the false and misleading 

statements being issued regarding the Company, and approved or ratified these statements in 

violation of the federal securities laws.

37. As an officer and controlling person of a publicly-held company whose shares are 

registered with the SEC pursuant to the Exchange Act and trade on the NYSE which is governed

by the federal securities laws, Defendant Zoley had a duty to promptly disseminate accurate and 

truthful information with respect to GEO’s operations, business, products, markets, management, 

and present and future business prospects. In addition, Defendant Zoley had a duty to correct any 

previously-issued statements that had become materially misleading or untrue, so that the market 

price of GEO’s publicly-traded shares would be based upon truthful and accurate information. 

Defendants’ false and/or misleading misrepresentations and omissions during the Class Period 

violated these specific requirements and obligations.

38. Defendant Zoley, because of his position of control and authority as an Officer 

and/or Director of GEO, was able to, and did, control the content of the various SEC filings, press 

releases and other public statements pertaining to the Company during the Class Period. Defendant

Zoley was provided with copies of the documents alleged herein to be misleading before or shortly 

after their issuance or had the ability or opportunity to prevent their issuance or cause them to be 

corrected. Accordingly, Defendant Zoley is responsible for the accuracy of the public statements 

detailed herein and is, therefore, primarily liable for the representations contained therein.

39. Defendant Zoley is liable as a participant in a fraudulent scheme and course of 

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business that operated as a fraud or deceit on purchasers of GEO shares by disseminating 

materially false and/or misleading statements and/or concealing material adverse facts.

IV. SUBSTANTIVE ALLEGATIONS

A. Company Background

1. GEO’s History

44. Founded in 1984, GEO is purportedly the first fully integrated equity REIT 

specializing in the design, financing, development, and operation of secure facilities, processing 

centers, and community reentry centers in the U.S., Australia, South Africa, and the United

Kingdom. GEO is also purportedly a leading provider of enhanced in-custody rehabilitation, postrelease support, electronic monitoring, and community-based programs. The Company’s 

worldwide operations include the ownership and/or management of, among other facilities, 

detention centers and halfway houses in the U.S.

45. At the time GEO restructured to become a REIT in 2013, there was significant 

room to grow because the U.S. had the largest prison population in the world and private prisons 

represented less than 10% of a $74 billion market. But the private prison model has always had 

critics and controversies, including public outcry about how inmates were treated and accusations 

that the government guaranteed high occupancy rates when it awarded a contract. In addition, 

historically, the profitability of private prisons decreased in recessions with fewer arrests made 

and when there changes in governments disfavoring private prisons.

46. For the last three decades, GEO has had long-term agreements with the federal 

government to provide services for the Federal Bureau of Prisons (“BOP”), ICE, and the U.S. 

Marshal Service that were regularly renewed. GEO has also had long-term contracts with several 

state Department of Corrections (“DOC”) owning and/or operating correctional facilities in 

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Florida, Georgia, Louisiana, Oklahoma, Arizona, New Mexico, California, Vermont, Virginia and 

Indiana that were regularly renewed.

47. GEO is one of the two biggest players in private corrections, with more than 

89,000 corrections and detention beds in 127 U.S. facilities, as well as 7,600 beds in six 

international facilities as of mid-2019.

48. GEO is also the largest provider of community correction, youth and electronic 

monitoring services in the U.S. In 2017, almost 23% of GEO’s revenue came from GEO Care, the 

division which manages community correction services, including reentry facilities, i.e., halfway

houses, day reporting centers, youth service facilities, and electronic monitoring services.

2. Ramifications of GEO’s REIT Structure

49. After becoming a REIT in 2013, GEO was required to distribute at least 90% of 

its income each year as dividends to shareholders. That structure has allowed GEO to avoid 

corporate- level taxation, because its shareholders are taxed on the dividends. However, as a 

consequence, GEO has had limited funds with which to run its operations and has had to rely on 

the capital markets to fund growth investments.

50. Accordingly, GEO’s continued success—as well as that of peer companies, like 

CoreCivic—depended on lucrative financing deals with large banks like JPMorgan, WF and BofA 

on top of maintaining the stable, revenue-generating contracts it had with federal, state and local 

governments requiring it to comply with a host of regulatory requirements while maintaining 

standards of due process and human rights.

51. Going into the Class Period, JPMorgan was far and away the largest lender to 

private prison behemoths GEO and CoreCivic, holding $254 million of their debt as of June 2017.5

5 David Dayen, JPMorgan Chase Made a Secret $159.5 Million Deal to Finance a Private Prison, MAKE 

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WF and BofA also provided revolving credit, term loans and bond underwriting to GEO (and 

CoreCivic), helping them fund facility construction and general operations. In 2018 alone, 

JPMorgan, BofA and WF raised over $1.8 billion in debt over three deals for GEO and CoreCivic.

52. This ready access to capital contributed to GEO’s ability to maintain its quarterly 

dividend levels, which is a key metric for investors. Beyond being income for investors, the 

dividends signaled that there was enough cash to be distributed to investors each quarter as a result 

of GEO’s successful operations, growth, and profitability. Moreover, a stable or increasing

dividend signaled ongoing business profitability, stability, and strength – not a fleeting windfall 

based on aberrant performance. Accordingly, in order to sustain or increase the stock price, GEO 

needed to have sustainable, long-term dividends levels, not fluctuating between high dividends 

one quarter and low dividends the next.

53. Critically, to maintain those dividends, as well as the capital investments that 

funded operational growth, GEO had to successfully maintain and operate its facilities in 

compliance with a host of contractual and regulatory requirements, while satisfying standards of 

due process and human rights – all in a sector that was closely watched by extremely active human 

rights organizations like the Human Rights Watch and increasingly monitored by influential 

government officials like Senator Warren, Senator Kamala Harris, and Congresswoman OcasioCortez. Any failure would jeopardize GEO’s business on numerous fronts. If GEO violated 

applicable regulations or otherwise infringed due process or human rights of prisoners or detainees, 

GEO could face extreme public scrutiny, bad publicity, lawsuits, and government investigations, 

which would almost certainly result in them losing lucrative government contracts and/or funding 

from the publicly-traded banks that are subject to extensive public and shareholder scrutiny. 

THE ROAD NY, (Dec. 4, 2018), https://maketheroadny.org/jpmorgan-chase-made-a-secret-159-5-milliondeal-to-finance-a-private-prison/ (last visited Nov. 17, 2020).

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Indeed, banks like JPMorgan, BofA and WF would be hard-pressed to do business with a private 

prison company that had violated human rights or mistreated its wards. And as explained above, 

if GEO lost its lucrative government contracts or funding from major banks, it risked its operations 

and ability to continue growing and be profitable. Indeed, without the government contracts and 

loans, GEO’s ability to continue operating as a REIT would be jeopardized as paying 90% of 

profits as dividends would be unsustainable. Of course, if GEO’s profits lowered, its dividends 

would be lower, and its share price would crash. Similar issues would occur if GEO exited its 

REIT structure.

3. Relevant Standards and Guidelines Applicable to GEO Facilities

54. Under its contracts with the BOP and U.S. Marshall Services (“USMS”), both 

operating under the U.S. Department of Justice (“DOJ”), GEO facilities – including halfway 

houses and correctional centers – had to obtain and maintain accreditation from the American 

Correctional Association (“ACA”) and the National Commission on Correctional Health Care. 

Further, each facility’s Health Services Administrator (“HSA”) and Clinical Director was 

responsible for the operation of that facility’s infectious disease program. Specifically, the HSA 

must provide infectious disease procedures that incorporate and reference, all applicable standards, 

guidelines, and recommendations from other federal agencies, including the Department of Health 

and Human Services (“HHS”), the Centers for Disease Control and Prevention (“CDC”), the 

Occupational Safety and Health Administration (“OSHA”), and the National Institutes for 

Occupational Health.

55. Under its contracts with various state DOC and HHS, each GEO facility –

including youth facilities, correctional facilities and halfway houses – must utilize national 

correctional expected practices provided by the ACA and was responsible for ensuring that its 

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operations maintain ACA standards.

56. Under its contracts with ICE, GEO facilities had to adhere to the 2000 National 

Detention Standards (“NDS”), ICE’s 2008 Performance-Based National Detention Standards 

(“PBNDS”), or the 2011 PBNDS, as revised in 2016. ICE detainees are held in civil, not criminal, 

custody, which is not supposed to be punitive. The PBNDS establish consistent conditions of 

confinement, program operations, and management expectations within ICE’s detention system. 

Since both the NDS and PBNDS were modeled after the ACA, detention centers had to follow 

CDC guidelines for the prevention and control of infectious and communicable diseases and

OSHA and applicable state guidelines for managing bio-hazardous waste and decontaminating 

medical and dental equipment. Further, each facility had to have written plans addressing the 

management of infectious and communicable diseases, including screening, prevention, education, 

identification, monitoring and surveillance, immunization (if applicable), treatment, follow-up, 

isolation (if indicated) and reporting to local, state and federal agencies. Designated medical staff 

also had to notify the ICE Health Service Corps’ (“IHSC”) Public Health, Safety, and Preparedness 

Unit of any detainee with a significant communicable disease and of any contact or outbreak 

investigations involving detainees exposed to a significant communicable disease without known 

immunity. All ICE facilities are subject to review and recommendation by the DHS’s OIG.

B. Operational deficiencies led to lawsuits and/or governmental investigations 

impacting GEO’s cashflows.

57. Dozens of lawsuits have been filed against GEO over the past two decades, 

alleging, inter alia, inadequate medical care, deaths, and exploitive labor practices.6 A number of 

those lawsuits did or likely will impact GEO’s cashflows and profitability due to the massive legal 

6 GEO Group/GEO Care Rapsheet, Private Corrections Working Group,

https://www.privateci.org/rap_geo.html (last visited Nov. 16, 2020); GEO Group, Project on Government

Oversight, https://www.contractormisconduct.org/contractors/253/geo-group (last visited Nov. 16, 2020).

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fees and fines and in many cases, the termination of government contracts.

1. Deficiencies at the Aurora Facility in Colorado

58. Notably, a 2017 study of detention facilities found severe health care deficiencies 

in facilities operated by, inter alia, private contractors, including GEO. Specifically, the study—

basing its conclusions on information in death reviews by ICE’s Office of Detention Oversight 

(“ODO”)—found that one-third of detainee deaths between 2012 and 2015 were due in part to

substandard medical care.7 This report spurred at least one complaint filed in June 2018 by the 

American Immigration Council and American Immigration Lawyers Association on behalf of 

current and formerly detained individuals at the GEO-operated Denver Contract Detention Facility 

in Aurora, Colorado (“Aurora Facility”), demanding an investigation into the facility’s inadequate 

medical and mental health care conditions (“Administrative Complaint”).8

59. In an earlier filed lawsuit involving the Aurora Facility, Menocal v. GEO Grp., 

Inc., No. 14-cv-02887 (D. Colo.), on appeal, Geo Group, Inc. v. Menocal, No. 17-cv-1125 (10th 

Cir.) (“Aurora Forced Labor Case”), the Tenth Circuit in February 2018 affirmed the district 

judge’s certification of a class action brought on behalf of immigrant detainees at the Aurora 

Facility who accused GEO of using forced labor and unjustly enriching itself by paying them $1 

for a day’s work. One of the classes certified consisted of detainees who alleged that GEO’s 

Housing Unit Sanitation Policy at the Aurora Facility violated the federal Trafficking Victims 

Protection Act because it forced them to either take part in a facility cleaning program or face 

7 Human Rights Watch, Systemic Indifference: Dangerous and Substandard Medical Care in US

Immigration Detention (May 2017), https://www.hrw.org/report/2017/05/08/systemicindifference/dangerous-substandard-medical-care-us-immigration-detention (last visited Nov. 16, 2020).

8 American Immigration Counsel, Complaint Filed with DHS Oversight Bodies Calls for Improvements to

Medical and Mental Health Care of Immigrants in Aurora Detention Center (June 4, 2018),

https://www.americanimmigrationcouncil.org/news/complaint-filed-dhs-oversight-bodies-callsimprovements-medical-and-mental-health-care (last visited Nov. 16, 2020).

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punishment, including solitary confinement.9

60. This class action was the first of a series of lawsuits questioning GEO’s practice 

of forcing detainees to do manual labor for $1 a day (sometimes less) or face solitary 

confinement.

10 GEO itself characterized these lawsuits as a “potentially catastrophic risk” in 

communications to ICE which caught the attention of Senator Warren, who conducted an 

investigation and sent a letter to the Honorable Jay Clayton, SEC Chairman, on July 24, 2019. In 

her letter, Senator Warren highlighted “a series of misleading public statements and omissions of 

material facts by top executives of The GEO Group, Inc.” about the financial “impact of the series 

of lawsuits against the company” in light of non-public communications by corporate executives, 

including Defendant Zoley, to ICE about GEO being “deeply alarmed at the rapidly increasing 

costs” estimated to be as high as $20 million.11

2. Deficiencies at the Adelanto Facility in California

61. In March 2018, a state-contracted disability monitor, Disability Rights California, 

reported widespread lack of medical care and disability accommodation at the GEO-operated 

facility in Adelanto, California (“Adelanto Facility”).12 On June 18, 2018, stakeholders in the 

Adelanto Facility expressed immediate concerns regarding its inadequate medical and mental 

9 Kevin Penton, Advocates Say Colo. Detention Site Providing Inadequate Care (June 5, 2018),

https://www.law360.com/articles/1050393/advocates-say-colo-detention-site-providing-inadequate-care

(last visited Nov. 16, 2020).

10 State of Washington v. The Geo Group, Inc., No. 3:17-cv-055806, (W.D. Wash.); Chao v. GEO Group,

Inc., No. 3:17-cv-05769 (W.D. Wash.) (collectively, “Washington Forced Labor Cases”); Novoa v. The

Geo Group, Inc., No. 5:17-cv-02514 (C.D. Cal.) (“Adelanto Forced Labor Case”).

11 Letter from Elizabeth Warren, U.S. Senator from Mass. to The Honorable Jay Clayton, Chairman for

the SEC (June 24, 2019),

https://www.warren.senate.gov/imo/media/doc/2019.07.24%20Letter%20to%20SEC%20on%20GEO%2

0Group's%20Misleading%20Statements.pdf.

12 Disability Rights Cal., There Is No Safety Here, (Mar. 2019) at 17,

https://www.disabilityrightsca.org/system/files/file-attachments/DRC_REPORT_ADELANTOIMMIG_DETENTION_MARCH2019.pdf

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health care at a California DOJ meeting in Los Angeles, California.13

62. In September 2018, DHS OIG issued a Management Alert identifying several 

egregious violations of ICE standards that posed significant health and safety risks, including 

untimely and inadequate detainee medical care, based on an unannounced inspection of the 

Adelanto facility in May 2018.14 In response, Pablo Paez, GEO’s executive VP of corporate

relations, provided Law360 a statement from the Company published on October 3, 2018 that it 

was “taking the report’s findings ‘very seriously’ and [was] conducting an ‘in-depth review’ with 

its third-party medical services subcontractor.”15 The report was attached as an exhibit filed on 

September 27, 2019 in the Adelanto Forced Labor Case - one of the “potentially catastrophic” $1 

per day cases.16 It was filed again by Netflix in GEO v. Netflix, on August 3, 2020 (ECF No. 27-

1).

63. In June 2019, DHS OIG published its full report from the unannounced inspections 

of four detention centers including the GEO-operated Aurora Facility, Adelanto Facility, and the 

LaSalle ICE Processing Center in Louisiana (“LaSalle Facility”). The report confirmed violations 

of ICE’s detention standards and the unsafe and unhealthy conditions at all of the facilities, raising 

concerns about the environment in which detainees were held.17

13 Xavier Becerra, California Attorney General, The California Department of Justice’s Review of

Immigration Detention in California, (Feb. 2019) at 23,

https://oag.ca.gov/sites/all/files/agweb/pdfs/publications/immigration-detention-2019.pdf.

14 Office of Inspector Gen., U.S. Dep’t of Homeland Sec., OIG-18-86: Management Alert – Issues

Requiring Action at the Adelanto ICE Processing Center in Adelanto, California, (Sept. 27, 2018) at 9,

https://www.oig.dhs.gov/sites/default/files/assets/2018-10/OIG-18-86-Sep18.pdf.

15 Law360, Report Finds Bad Medical Care, Nooses At Calif. ICE Facility (Oct. 3, 2018, 5:19 PM EDT),

https://www.law360.com/articles/1088999/report-finds-bad-medical-care-nooses-at-calif-ice-facility.

16 Declaration, Novoa v. The GEO Group, Inc., (C. D. Cal. Sept. 29, 2019) (No. 5:17-cv-02514) (ECF No.

193-27).

17 Office of Inspector Gen., U.S. Dep’t of Homeland Sec., OIG-19-47: Concerns about ICE Detainee

Treatment and Care at Four Detention Facilities (June 3, 2019),

https://www.oig.dhs.gov/sites/default/files/assets/2019-06/OIG-19-47-Jun19.pdf.

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64. These DHS OIG reports contributed to the filing of a proposed class action, 

Fraihat v. ICE, No. 5:19-cv-01546 (C.D. Cal.) (“Substandard Medical Care Case”), on August 19, 

2019 on behalf of detainees accusing ICE of shirking its legal obligation to provide adequate 

medical, mental health and disability accommodations as mandated by federal law and the U.S. 

Constitution at 158 detention facilities nationwide, including GEO’s Adelanto Facility, as well as 

several other GEO facilities in California and across the country.18

3. Deficiencies at the Northeast Facility in New Mexico

65. On November 7, 2018, during the GEO’s third quarter 2018 (“3Q18”) earnings 

call, J. David Donahue, GEO’s Senior Vice President (“SVP”) and President of the GEO Secure 

Services (formerly known as GEO Corrections and Detentions), boasted that the Company had

amended the contracts for all three of its New Mexico correctional facilities, including the 

Northeast New Mexico Correctional Facility (“Northeast Facility”), to provide “incremental 

funding to support wage increases for [GEO] employees.” In 2018, approximately 2% of GEO’s 

total revenue of $2.3 billion came from the state of New Mexico. Suddenly, on June 27, 2019, the 

Company announced that after 10 years of managing the Northeast Facility, “GEO had decided to 

amicably end its contract,” claiming “it [was] no longer feasible to recruit and retain personnel in 

the region without CPI increases that have not been funded over the last decade.”

66. The reason for the termination became clear in July 2019, when the police 

department in Clayton, New Mexico and the state police announced an investigation into a 

September 23, 2017 incident at the medium security Northeast Facility which had 625 beds and 

required 20 security guards to be fully staffed. That day, a convicted serial killer overtook one of 

18 Nicole Narea, Immigrant Detainees Sue Over ‘Deplorable’ Medical Care, LAW360 (Aug. 19, 2019),

https://www.law360.com/articles/1189505/immigrant-detainees-sue-over-deplorable-medical-care (last

visited Nov. 16, 2019).

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the just nine guards on duty, leading to the state’s most dangerous prison uprising in the past 20 

years.

67. Ultimately, GEO paid $1.3 million in fines during 2018 for excessive 

understaffing in violation of its contract with the state. When asked about the contract with GEO, 

state Senator Cisco McSorley said, “I want GEO to fulfill the terms of the contract. They say that 

they’re in the business of keeping our prisons safe and secure and they’re not doing it.” While 

there were 204 allocated positions at the Northeast Facility, GEO only had a staff of 120 in late 

June 2019 when it announced it was ending the contract.

4. Deficiencies at the Delaware County Prison in Pennsylvania

68. After multiple crises in the summer of 2019 involving multiple suicides, prisoner 

riots, and violence against staff and between prisoners at the GEO-operated Delaware County 

Prison in Pennsylvania, formerly known as the George W. Hill Correctional Facility (“Delaware 

County Prison”), Delaware County abolished the two-person appointed Board of Prison Inspectors 

and replaced it with a Jail Oversight Board (“JOB”), consisting of four county officeholders and 

three members of the public, on September 25, 2019.

69. But the Delaware County Prison continued to be extremely poorly run. Notably, 

from Christmas Eve though Christmas Day 2019, at least eight prisoners were hospitalized, and 

one prisoner died after an apparent mass drug overdose at the Delaware County Prison which 

resulted from inexperienced guards at the understaffed facility. Unsurprisingly then, on January 3, 

2020, just as the COVID-19 pandemic began spreading throughout the United States, a former 

Delaware County prisoner filed a lawsuit against GEO, former superintendents and the prison’s 

medical unit alleging, inter alia, severe overcrowding.

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70. In February 2020, JOB took the preliminary step towards ending Delaware 

County’s contract with GEO by voting to commission a study to determine what was needed to 

transition the Delaware County Prison back to being publicly run.

5. Deficiencies at the Garza Center in Texas

71. In June 2020, a report detailing prolonged violations of regulatory standards for 

compliance from May 1, 2018 to May 1, 2020 at the GEO-operated Hector Garza Residential 

Treatment Center (“Garza Center”) was filed in M.D. et al. v. Abbott et al., No. 2:11-cv-00084 

(S.D. Tex.) (ECF No. 875). The Garza Center had a license to serve up to 139 male and female 

residents between the ages of ten to seventeen. However, after the Department of Family and 

Protective Services (“DFPS”) stated on May 20, 2020 that the Garza Center would be “phasing

out their service to children in DFPS conservatorship” based on its “determin[ation] that while 

improvements were being made, their particular model was not the direction DFPS was going 

long-term,” the Texas Health and Human Services Commission Residential Child Care Licensing 

Division stated that it “will reevaluate their history for [corrective action] if we receive a new 

[Reason to Believe] from DFPS.”

6. Deficiencies at the Deyton Facility in Georgia

72. In July 2020, the DOJ OIG published an audit assessing GEO’s performance and 

compliance with the terms, conditions, laws, and regulations applicable to the contract it was 

awarded to operate the Robert A. Deyton Detention Facility (“Deyton Facility”) in Lovejoy, 

Georgia. The DOJ OIG found that GEO did not comply with the terms and laws pertaining to 

mandatory training and detainee safety and failed to provide staff services between January 2018 

and December 2019 for which it had been paid an estimated $3.1 million.19

19 DOJ, Audit of the U.S. Marshals Service’s Contract Awarded to the GEO Group, Incorporated to

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7. Deficiencies in Border facilities in Texas

73. In May 2019, DHS OIG issued a report warning of “dangerous overcrowding” 

involving hundreds of adult migrants in standing room only conditions at a Border Patrol 

processing center in El Paso, Texas, some of whom had been held in the temporary facilities for 

weeks on end. The report also expressed concern that the “overcrowding and prolonged detention 

represent an immediate risk to the health and safety not just of the detainees, but also DHS agents 

and officers,” noting increased incidents of illness even among Border Patrol staff.20 As discussed 

supra, DHS OIG then issued a report in June 2019, raising concerns about the treatment and care

at four detention centers including three GEO facilities, the Aurora Facility, the Adelanto Facility, 

and the LaSalle Facility. In early July 2019, DHS OIG issued a second report calling for immediate 

action at the U.S.-Mexico border. Specifically, the July report raised concerns about the dangerous 

overcrowding and prolonged detention of children and adults in not just one Texas facility, but 

several detention facilities in the Rio Grande Valley. GEO operates one of the largest family 

detention centers in Texas, the Karnes County Residential Center (“Karnes Center”), with 830 

beds. While the Flores Settlement agreement says family detention facilities are supposed to be 

“non-secure,” the Karnes Center is surrounded by a brick wall.21

74. In July 2019, the House Oversight and Reform Committee sent letters to GEO, 

and other companies managing detention centers, demanding documents and communications 

pertaining to the hundreds of millions of dollars in government contracts they had received amid 

Operate the Robert. A. Deyton Detention Facility, Lovejoy, Georgia (July 2020),

https://oig.justice.gov/sites/default/files/reports/20-085_0.pdf.

20 Ross Ramsey, Analysis: U.S.-Mexico border detention efforts aren’t good enough,according to the 

government itself, THE TEXAS TRIBUNE (July 12, 2019), https://www.texastribune.org/2019/07/12/usmexico-border-detention-efforts-arent-good-enough-government-says/ (last visited Nov. 16, 2020).

21 Gretchen Frazee, A Look Inside the Facilities Where Migrant Families are Detained, PBS (Aug. 26, 

2019), https://www.pbs.org/newshour/nation/new-trump-rules-would-detain-families-longer-this-iswhere-they-would-stay (last visited Nov. 17, 2020).

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the concerning reports of the deplorable treatment of migrants at the southern border. Among these 

requests, the Committee asked for documents pertaining to compliance (including how GEO 

ensured compliance with DHS standards), the names and titles of employees who were tasked with 

upholding DHS standards, and violations at the detention centers and how they were remediated. 

The committee also asked for all communications with ICE, DHS and HHS leadership, the White 

House and political appointees.22

C. Public and political scrutiny increasingly drew attention to GEO’s operational 

deficiencies, negatively impacting its access to capital.

1. Intense scrutiny led JPMorgan, U.S. Bank and WF to cut ties with GEO

75. As more damning information regarding the squalid conditions at detention 

facilities, the mistreatment of migrants, and the separation of families gained public and political 

attention in 2017 and 2018, banks began rethinking their funding of the private prison industry and 

institutional investors began rethinking their decision to invest in private prisons.23

76. As early as May 2017, approximately 250 protestors marched from a branch of 

WF—another bank branded by protestors as “Corporate Backers of Hate”—to JPMorgan’s annual 

meeting. In response to questions about JPMorgan’s role in financing debt for private prisons, 

including GEO, JPMorgan CEO Dimon stated that the bank would look into whether it should 

continue to help finance private prisons.24, 25

22 Leigh Ann Caldwell, House Democrats Seek Documents From For-Profit Companies Detaining 

Migrants, NBC NEWS (July 11, 2019), https://www.nbcnews.com/politics/congress/house-democratsseek-documents-profit-companies-detaining-migrants-n1028591 (last visited Nov. 16, 2020).

23 Rachel Layne, Private Prisons were Supposed to Thrive Under Trump—Then Came a Backlash, CBS

NEWS (July 29, 2019), https://www.cbsnews.com/news/private-prison-companies-were-supposed-tothrive-under-trump-instead-theyre-under-fire/ (last visited Nov. 16, 2020).

24 Jennifer Surane and Felice Maranz, Dimon Says He’ll Look Into Concerns About Private Prison 

Financing, BLOOMBERG (May 16, 2017), https://www.bloomberg.com/news/articles/2017-05-16/dimonsays-he-ll-look-into-concerns-on-private-prison-financings (last visited Nov. 16, 2020).

25 Josh Saul, Jamie Dimon, Head of JPMorgan Chase, Pressed on Private Prisons, Trump Council Seat,

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77. In April 2018, an activist organization issued a report revealing that JPMorgan 

was by far the largest lender to private prisons, including GEO and CoreCivic. Activists continued 

to condemn JPMorgan’s financial entanglement with private prisons throughout 2018, arguing that 

its professed commitment to human rights did not fit with its funding of for-profit prisons, and 

organized another protest of Dimon at a Goldman Sachs conference in December 2018.26

78. In response to the separation of children from their parents under the Zero 

Tolerance Policy, the Trump administration adopted in April 2018, CalSTRS, the 11-largest

retirement fund in the world,27 decided to conduct due diligence on the business practices of both 

GEO and CoreCivic. In July 2018, CalSTRS representatives began visiting detention facilities and 

conducting meetings with senior management concerning their operational processes and risk 

management efforts. By November 2018, CalSTRS had voted to remove all of its holdings from 

CoreCivic and GEO, divesting approximately $13.7 million.28

79. GEO was also on notice that it had significant political exposure. The 2018 

election cycle saw a surge of candidates and lawmakers promising to forego campaign donations 

from private prisons, including GEO.29 For example, ten members of the U.S. House of 

Representatives, two Republicans and eight Democrats, pledged not to take GEO’s money, 

NEWSWEEK (May 16, 2017), https://www.newsweek.com/jpmorgan-chase-jamie-dimon-immigrationprivate-prison-protest-make-road-610463 (last visited Nov. 16, 2020).

26 David Dayen, In These Times, JPMorgan Chase Made a Secret $159.5 Million Deal to Finance a 

Private Prison, NEWSWEEK (Dec. 4, 2018), https://maketheroadny.org/jpmorgan-chase-made-a-secret159- 5-million-deal-to-finance-a-private-prison/ (last visited Nov. 16, 2020).

27 Pensions & Investments, The P&I Willis Towers Watson 300: World’s largest retirement funds, (Sept. 

4, 2017), https://www.pionline.com/article/20170904/INTERACTIVE/170839963/the-p-i-willis-towerswatson-300-world-s-largest-retirement-funds (last visited Nov. 17, 2020).

28 Michelle Mussuto, CalSTRS to Divest from Private Prisons CoreCivic and GEO Group to be removed 

from Teachers’ Retirement Fund Portfolio (Nov. 7, 2018), https://www.calstrs.com/news-release/calstrsdivest-private-prisons-0 (last visited Nov. 16, 2020).

29 Steve Horn, Under Pressure, Some Politicians Return Private Prison Campaign Cash, PRISON LEGAL 

NEWS (Feb. 5, 2019), https://www.prisonlegalnews.org/news/2019/feb/5/under-pressure-somepoliticians-return-private-prison-campaign-cash/ (last visited Nov. 17, 2020).

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including House Speaker Paul Ryan and Oklahoma U.S. Senator James Lankford. Other

lawmakers made similar pledges, including U.S. House members Eric Swalwell and Karen Bass 

of California, Ted Lieu of Hawaii, Danny Davis of Illinois, Emanuel Cleaver of Missouri, Hakeem 

Jeffries of New York, David Price of North Carolina, Filemon Vela, Jr. of Texas and Denny Heck 

of Washington. By July 2018, every major Democratic candidate for Florida governor publicly 

refused to accept GEO’s money and the Florida Democratic Party banned all donations from 

private-prison firms.30

80. By 2019, in the wake of the zero-tolerance policy, 250 different organizations had 

formed the Families Belong Together Coalition and was able to, inter alia, collect over 1 million

signatures urging JPMorgan and other banks to separate themselves from CoreCivic and GEO.31

On Valentine’s Day 2019, an immigrants’ rights group, Make the Road New York, sent a mariachi 

band and protestors with “Break Up With Prisons” signs to Dimon’s Manhattan townhome.32

2. Continued scrutiny limited GEO’s ability to access other financing

81. In GEO’s annual shareholder meeting in May 2019, a majority of shareholders 

passed a resolution demanding that the Company better report human rights policies and violations 

to investors by September 2019. GEO’s Board initially told investors to vote against the resolution, 

claiming its internal abuse-monitoring protocols were already adequate, that the requested deadline 

30 Jerry Iannelli, Geo Group’s Own Shareholders Concerned About Human Rights in the Company’s 

Prisons, MIAMI NEW TIMES (May 7, 2019), 

https://www.miaminewtimes.com/content/printView/11166775 (last visited Nov. 16, 2020); 

https://www.neveragainaction.com/our-coverage (last visited Nov. 17, 2020).

31 Dymond Green, Tala Hadavi, Why Big Banks Could Be Killing Private Prisons, CNBC (Jan. 2, 2020), 

https://www.cnbc.com/2020/01/02/why-private-prisons-geo-group-and-corecivic-are-struggling-undertrump.html (last visited Nov. 16, 2020).

32 Emily S. Rueb, JPMorgan Chase Stops Funding Private Prison Companies, and Immigration Activists 

Applaud, THE NY TIMES, (March 6, 2019), https://www.nytimes.com/2019/03/06/business/jp- morganprisons.html (last visited Nov. 16, 2020).

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was too soon, and any report would be limited by the Company’s confidentiality obligations.33

82. While GEO claimed to be doing all it could to reduce abuse, institutional investor 

Patricia Zerega said on behalf of shareholders in favor of the resolution, “[w]e want to be able to 

make a judgment that the company is moving forward...they claim they have very good attention 

to human rights issues. We want to be able to verify that that’s true. It’s like that old saying: Trust 

but verify.” GEO eventually issued a report in September 2019, after its “position ha[d] evolved.”34

In a letter published in November 2019, institutional shareholders and members of the Interfaith 

Center on Corporate Responsibility claimed the report fell far short of expectations and failed to 

meet standards for human rights policies and processes, leaving the Company exposed to 

numerous legal, reputational and financial risks. The letter pointed to GEO’s substandard care as

reason for concern, as evidenced by DHS’s OIG September 2018 report finding “serious issues 

relating to safety, detainee rights and medical care” at the Adelanto Facility and the September 

2017 riot during which the Northeast Facility had less than half the staff it was required to have.35

83. By early August 2019, the list of banks refusing to loan to private prisons like 

GEO had grown to at least eight major institutions: JPMorgan, BofA, WF, Suntrust, BNP, Fifth 

Third, Barclays and PNC. Together these eight banks represented an estimated $2.35 billion, or 

87.4%, of the credit lines and term loans that were central to private prisons’ operations. As a 

REIT, GEO (like its peer company, CoreCivic) depended heavily on short-term borrowing through 

these lines of credit and loans to keep its operations funded day-to-day. But all of the publiclydisclosed banks that provided credit and term loans to GEO had committed to ending future 

33 Geo Group’s Own Shareholders Concerned About Human Rights in the Company’s Prisons, supra fn. 

24.

34 Id.

35 Interfaith Center on Corporate Responsibility, Investors Say GEO Group is Ill-prepared to Guard 

Against Human Rights Risks (Nov. 18, 2019), https://www.iccr.org/investors-say-geo-group-ill-preparedguard-against-human-rights-risks (last visited Nov. 16, 2020).

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financing relationships with the private prison industry.36

84. And in October 2019, the largest public pension fund in the U.S., the California 

Public Employees Retirement System (“CalPERS”), announced that it was divesting all of its 

holdings – approximately $10.8 million – in GEO and CoreCivic. Following CalPERS’ 

announcement, the California Faculty Association said, “[o]ur union was not going to stand by 

and watch our pension dollars support these terrible corporations, and we’re pleased to see that 

CalPERS investment analysts have come to the conclusion.”37

D. GEO’s reduced cashflows exacerbated operational deficiencies in dealing with 

COVID-19 which led to further scrutiny on GEO and its eventual dividend 

cut.

1. GEO was unable to manage well-known and understood infectious 

diseases leading up to COVID-19

85. The record number of people in immigration detention centers due to the Zero 

Tolerance Policy led to multiple infectious-disease outbreaks at GEO facilities during the Class 

Period. In the GEO-operated Pine Prairie detention center in Louisiana (“Pine Prairie”), for 

example, there were 18 confirmed or probable cases of mumps, resulting in 288 detainees being 

quarantined as of mid-February 2019. Internal Pine Prairie emails reveal concerns raised by 

medical staff regarding the facility’s handling of the outbreak, quarantine protocols and transfer of 

infected detainees who were contagious, but did not show symptoms of viral diseases.38

36 Gin Armstrong, Private Prisons Now Face 87.4% Financing Gap as Banks Continue to Flee Industry

(Aug. 14, 2019), https://news.littlesis.org/2019/08/14/private-prisons-now-face-87-4-financing-gap-asbanks-continue-to-flee-industry/ (last visited Nov. 16, 2020).

37 Julie Ainsley, Biggest Public Pension Fund in U.S. Dumps Private Prison Firms that Run ICE Migrant 

Detention Centers, NBC NEWS (Oct. 21, 2019), https://www.nbcnews.com/politics/immigration/biggestpublic-pension-fund-u-s-dumps-private-prison-firms-n1063231 (last visited Nov. 16, 2020).

38 Mica Rosenberg, Kristina Cooke, Mumps, other outbreaks force U.S. detention centers to quarantine 

over 2,000 migrants, REUTERS (Mar. 10, 2019), https://www.reuters.com/article/us-usa-immigrationoutbreaks/mumps-other-outbreaks-force-u-s-detention-centers-to-quarantine-over-2000-migrantsidUSKBN1QR0EW (last visited Nov. 16, 2020).

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86. In March 2019, dozens of detainees at the Aurora Facility began a hunger strike 

to draw attention to the continued spread of infectious diseases, resulting in multiple quarantines. 

At the time of the hunger strike, more than 200 detainees were under quarantine and of those, 

approximately 65 had already been under a mumps quarantine for two months and had just been 

informed that their quarantine would start over and last another 21 days.39 At one point in March, 

more than 350 detainees were under quarantine for possible exposure to either mumps or chicken 

pox or both. The Tri-County Health Department was forced to step in and provide a measles, 

mumps and rubella vaccination for detainees and staff at the Aurora Facility, allowing quarantine

to be lifted on May 20, 2019, but medical staff diagnosed another detainee with mumps just two 

days later, resulting in 50 or so detainees who were potentially exposed to be placed under 

quarantine. As of June 4, 2019, 152 detainees were under quarantine.40

87. Reports of the infectious-disease outbreaks led Congressman Jason Crow to 

initiate an investigation into the health conditions at the Aurora Facility in early 2019. In May 

2019, Crow introduced a bill that would require immigration detention facilities, like the Aurora 

Facility, to comply with site inspection requests from members of Congress within 48 hours.41

88. As of mid-June, ICE had 297 confirmed cases of mumps in 39 ICE facilities since 

September 2018, including in multiple GEO facilities.42 The rise in infectious disease outbreaks 

39 Tony Kovaleski, Frustrated Colorado ICE detainees in midst of hunger strike over infectious disease 

quarantines, THE DENVER CHANNEL (Mar. 6, 2019), https://www.thedenverchannel.com/news/localnews/frustrated-colorado-ice-detainees-in-midst-of-hunger-strike-over-infectious-disease-quarantines

(last visited Nov. 16, 2020).

40 Conor McCormick-Cavanagh, Detainees Under Infectious-Disease Quarantine at Immigration 

Detention Facility, WESTWORD (June 4, 2019), https://www.westword.com/news/quarantines-back-ataurora-geo-group-immigration-detention-facility-11365795 (last visited Nov. 16, 2020).

41 Id.

42 Heather Timmons, Justin Rohrlich, ICE is Struggling to Contain Spread of Mumps in Its Detention 

Centers, QUARTZ (June 14, 2019), https://qz.com/1626803/ice-struggles-to-contain-spread-of-mumps-inits-detention-centers/ (last visited Nov. 16, 2020).

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in 2019 sparked concern from advocates about access to adequate medical care in immigration 

detention facilities, which was only heightened after the White House proposed to increase the 

number of immigration family detention beds as part of its 2020 budget.43

2. GEO was unable to adequately respond to COVID-19

89. Already strapped for cash, and still reeling from its failed attempts at harnessing 

the 2019 infectious disease outbreaks, GEO was wholly unequipped to manage the incoming 

global COVID-19 pandemic in 2020. Not only did GEO have to address COVID-19 outbreaks in 

its facilities, but it faced rising legal costs associated with COVID-related litigation and decreased

revenue resulting from decreased detainee and inmate populations based on orders and/or 

guidelines from courts, governments and regulatory agencies.

90. Throughout the Class Period, including in November 2019, just prior to the start 

of the COVID-19 pandemic, Defendant Zoley assured the market that “[t]he residential centers we 

manage on behalf of ICE are highly rated by national accreditation organizations and provide highquality, culturally responsive services in safe and humane environment.”

91. In the ensuing weeks, COVID-19 exploded across the international news scene. 

By January 30, 2020, the World Health Organization (“WHO”) declared COVID-19 a Public 

Health Emergency of International Concern. By March 11, 2020, the WHO declared COVID-19 

a “pandemic.” ￼ In that declaration, WHO stated that it had “called every day for countries to 

take urgent and aggressive action. We have rung the alarm bell loud and clear.” Id. As was easy to 

predict, by March 26, 2020, the United States had become the country with the highest confirmed 

cases of COVID in the world. Yet as the WHO “rang the alarm bell loud and clear,” while the 

43 Nicole Einbinder, Immigrant Detention Centers are Dealing with Mumps and Chicken Pox Outbreaks, 

and Thousands Have Been Put Into Quarantine, INSIDER (Mar. 15, 2019), 

https://www.insider.com/disease-outbreaks-and-quarantines-in-immigration-detention-centers-sparkconcerns-2019-3 (last visited Nov. 16, 2020).

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virus traveled across the world, while it shut down countries, and while it slowed the global 

economy, GEO––a company with a demonstrated history of failing to control known infectious 

diseases––sat silent.

92. After being publicly notified of the “special risk” incarcerated and detained 

individuals faced with regard to infectious diseases on March 9, 2020, GEO confirmed to Law360 

that “no coronavirus cases ha[d] been detected” in any of its facilities and that it had “has issued 

guidance to each of its facilities and updated its policies to include preventing COVID-19.” But 

immigration attorneys stated that such “established protocols and detention standards may not be 

enough” in light of past “fail[ures] to manage other public health crises,” as GEO well knew based

on its robust track record of operational deficiencies, particularly in handling infectious diseases.44

93. To be sure, GEO was well aware of the COVID-19 pandemic. It’s response to 

Senator Warren’s correspondence makes it clear that “we are fully aware of the emerging health 

concerns presented by COVID-19.”

94. On March 18, 2020, the ACA published a report providing guidance on how to 

respond to COVID-19. Recommendations included: evaluating/screening all inmates upon intake 

and return from court/medical and all outside work locations; conducting noninvasive screenings 

of everyone for symptoms; formalization of a schedule to ensure cleaning and disinfection of high 

touch areas multiple times per day; immediate isolation of any inmates that present flu-like 

symptoms, followed by the enactment of contact precautions and personal protective equipment 

(place a mask on the inmate); and establishing an ongoing log to record patients presenting with 

flu-like symptoms to facilitate reporting to local health authorities and others as appropriate.

44 Suzanne Monyak, Attys Fear Coronavirus Spread In Immigration Detention, LAW360 (Mar. 11, 2020), 

https://www.law360.com/articles/1251570/attys-fear-coronavirus-spread-in-immigration-detention- (last 

visited Nov. 16, 2020).

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95. On March 25, 2020, while confirming that a staffer at the Aurora Facility had been 

diagnosed with COVID-19, ICE stated that the staffer did not have access to the area where 

detainees were housed and denied that any quarantines were in place. However, Laura Lunn, 

managing attorney at the Rocky Mountain Immigrant Advocacy Network, said that its clients had 

reported that (1) after someone in the A2 dormitory at the Aurora Facility (“A2”) had gotten sick, 

A2 had been sealed off and individuals in A2 were not permitted to leave, including to attend their 

immigration court hearings, and (2) people held in the Aurora Facility were experiencing flu-like 

symptoms, but could not verify their illness. A spokesperson for GEO said that none of the

Company’s employees at the Aurora Facility had been diagnosed with COVID-19.45

96. On the same day, the plaintiffs in the Substandard Medical Care Case, filed an 

emergency motion to certify a subclass and for preliminary injunction to implement protections 

against COVID-19.46,47 On April 20, 2020, the court ordered ICE to promptly evaluate and 

potentially release thousands of detainees who were at higher risk of contracting or dying from 

COVID-19, blasting the agency for its “callous indifference to the safety and well-being” of 

detainees in its care and noting that “[t]he evidence suggests systemwide inaction that goes beyond 

a mere difference of medical opinion or negligence.”48

97. March 25, 2020 was also the first time GEO even specifically mentioned COVID19 in its public filings with the SEC. Inexplicably, this mention is limited to noting that SVP

45 Suzanne Monyak, Staffer at Colo. Detention Center Diagnosed With COVID-19, LAW360 (Mar. 25, 

2020), https://www.law360.com/articles/1257221/staffer-at-colo-detention-center-diagnosed-with-covid19 (last visited Nov. 16, 2020).

46 Emergency Notice of Motion and Motion for Preliminary Injunction, Faour Abdallah Fraihat, et al. v.

U.S. Immigration and Customs Enforcement, et al., Case No. 5:19-cv-01546 (C.D. Cal.) (ECF No. 81).

47 Emergency Notice of Motion and Motion to Certify Subclasses, Faour Abdallah Fraihat, et al. v. U.S. 

Immigration and Customs Enforcement, et al., Case No. 5:19-cv-01546 (C.D. Cal.), ECF No. 83.

48 Order, Faour Abdallah Fraihat, et al. v. U.S. Immigration and Customs Enforcement, et al., Case No. 

5:19-cv-01546 (C.D. Cal.), ECF No. 132.

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Donahue would be “delaying retirement” and that this delay “will be helpful in addressing the 

challenges and impacts of the Coronavirus.”

98. On April 13, 2020, detainees in the Adelanto Facility filed a lawsuit seeking to 

reduce the population at the facility to allow for social distancing during the COVID-19 pandemic, 

Kelvin Hernandez Roman et al. v. Chad F. Wolf et al., Case No. 5:20-cv-00768 (C.D Cal.). On 

April 23, 2020, a federal judge granted the preliminary injunction and ordered the Adelanto 

Facility to immediately reduce detainee population, demanding the release at least 100 detainees 

by April 27, and 150 more by April 30, and to follow all measures recommended by the CDC,

including that “[a]ll detainee common areas and share items...shall be cleaned and disinfected by 

a professionally trained cleaning staff with appropriate equipment and supplies on a regular basis 

whenever those common areas and shared items are accessible to detainees.” ECF No. 55.

99. Also on April 13, 2020, across the country, detainees in three South Florida 

detention centers, including the GEO-operated Broward Transitional Center, filed a lawsuit in 

federal court alleging that the centers failed to comply with guidelines for preventing the spread 

of COVID-19 and seeking the release of a proposed class of vulnerable detainees.49 On April 30, 

2020, the Court ordered the centers to cut the number of people in their custody to 75%, and to 

hand out soap, cleaning materials and masks to all detainees.50 On June 6, 2020, the Court further 

ordered the detention centers to improve conditions, limit transfers to address the COVID-19 

pandemic, and to no longer place detainees in cohort quarantine without confirming the detainee 

had COVID-19.51 Based on credible testimony and sworn declarations, the Court noted that centers 

had “only partially complied with its own directives or CDC Guidelines” as they reduced 

49 Application/Petition (Complaint) for Writ of Habeas Corpus, Gayle et al. v. Meade et al., Case No. 

1:20-cv-21553, (S.D. Fl.), ECF No. 1.

50 Order, Gayle et al. v. Meade et al., Case No. 1:20-cv-21553, (S.D. Fl.), ECF No. 76.

51 Order, Gayle et al. v. Meade et al., Case No. 1:20-cv-21553, (S.D. Fl.), ECF No. 158.

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populations by simply shuffling detainees around to other facilities through transfers conducted in 

unsanitary conditions and without proper COVID-19 screening, “paint[ing] a grim picture of an 

agency steeped in deliberate indifference.”

100. On April 14, 2020, detainees in the Aurora Facility filed a lawsuit accusing it of 

failing to provide enough soap and violating CDC recommendations by keeping detainees in close 

quarters, pressing the Court to release medically vulnerable detainees during the COVID-19 

pandemic. The detainees allege that detention centers are a “hotbed for spread of the virus,” 

particularly where social distancing measures were impossible in the crowded Aurora Facility and

“no meaningful measures [have been taken] to curb the spread of the virus at the Aurora facility.” 

Detainees also criticized GEO’s failure to conduct widespread testing, despite the fact that two 

ICE employees who work in the Aurora Facility and three GEO employees who run the Aurora 

Facility had tested positive for COVID-19.52 Within 24 hours of the filing, alleging poor 

management of infectious diseases at the Aurora Facility, 8 of the 14 individuals claimed to be at 

high risk of contracting COVID-19 were released.

101. On April 20, 2020, detainees in Yuba County Jail and the GEO-operated Mesa 

Verde Detention Center (the “Mesa Verde Facility”) filed a lawsuit in federal court alleging that 

the facilities were so crowded that social distancing was impossible and no meaningful steps had 

been taken to reduce the risk of COVID-19 outbreaks.53 On June 9, 2020, after noting that “safety 

improvements came almost entirely from this litigation: ICE acted only because it was ordered to 

do so, or in response to concerns raised by the Court or the plaintiffs during the proceedings,” the 

52 Petition for Writ of Habeas Corpus and Complaint for Injunctive and Declaratory Relief, Leaford

Codner et al. v. Coate et al., 1:20-cv-01050 (D. Colo.), ECF No. 1.

53 Class Petition for Writ of Habeas Corpus and Class Complaint or Injunctive and Declaratory Relief, 

Angel de Jesus Zepeda Rivas et al. v. David Jennings et al., Case No. 3:20-cv-02731 (C.D. Cal.), ECF 

No. 1.

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Court proceeded to order that the facilities “maintain, at a minimum, the status quo that currently 

exists as it relates to protection from transmission of Covid-19.”54 The Court further noted that 

“ICE’s conduct and attitude towards its detainees at Mesa Verde and Yuba County Jail since the 

pandemic began have shown beyond doubt that ICE cannot currently be trusted to prevent 

constitutional violations at these particular facilities without judicial intervention.” Then, on 

August 6, 2020, the Court ordered the administration of at minimum, weekly, rapid-result COVID19 tests to all detainees at the Mesa Verde Facility, rejecting GEO and ICE’s claims of insufficient

testing supplies based on documentary evidence showing that they had avoided widespread testing 

out of “fear that positive test results would require them to implement safety measures.”55

102. Not until May 6, 2020, in the midst of crisis after crisis related to COVID-19 and 

this deluge of lawsuits and negative Court orders did GEO finally provide a substantive update to 

investors in its SEC filings. In a Form 8-K filed that day, GEO included an April 30, 2020 press 

release that “provide[d] an update on the impact of COVID-19 pandemic on GEO.”

103. On June 29, 2020, a complaint was filed in Texas federal court alleging that GEO

failed to abide by proper safety and health protocols at a federal halfway house in Houston, Texas 

and yet threatened to discipline residents if they called county or city agencies for COVID-19 

information, testing, or to inform them about any deaths at the facility.56 The complaint also alleged 

that GEO had not reported three COVID-19 related deaths at the facility, was not complying with 

the CDC and BOP’s guidance on social distancing or basic cleaning supplies, and was failing to 

54 Order Granting Motion for Preliminary Injunction, Angel de Jesus Zepeda Rivas et al. v. David 

Jennings et al., Case No. 3:20-cv-02731 (C.D. Cal.), ECF No. 229.

55 Order Granting Motion for Temporary Restraining Order, Angel de Jesus Zepeda Rivas et al. v. David 

Jennings et al., Case No. 3:20-cv-02731 (C.D. Cal.), ECF No. 500.

56 Keith Larsen, Private Prison REIT Threatened Inmates for Reporting Covid-19 Concerns: Lawsuit, 

THE REAL DEAL (July 6, 2020), https://therealdeal.com/2020/07/06/private-prison-reit-threatenedinmates-for-reporting-covid-19-concerns-lawsuit/ (last visited Nov. 16, 2020).

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provide basic medical care or to conduct screening of staff and/or residents for COVID-19.

104. On July 13, 2020, Congress’ Border Security, Facilitation & Operations 

Subcommittee held a hearing it titled “Oversight of ICE Detention Facilities: Examining ICE 

Contractors’ Response to COVID-19. Chairwoman Kathleen Rice opened the hearing by 

remarking on concerns that ICE contractors (including GEO) had not responded appropriately to 

the COVID-19 outbreak. In her opening statement, Rice noted: “Detention facilities must be held

to a high standard at all times, but in this moment, it is of vital importance. And yet, over the past

few months, it is clear that ICE and its contractors have not taken this outbreak seriously and

have not treated it aggressively enough. More than three thousand detainees, 280 contractors, and 

at least 45 ICE employees assigned to detention facilities have now tested positive for COVID-19. 

Sadly, we have lost at least two detainees and five contractors due to complications from the 

coronavirus after exposure at detention facilities. Despite these horrific losses, ICE is continuing

normal operations and contractors are following in lock step.”

105. Defendant Zoley testified at the hearing. In his written statement, he admitted that 

by the first week of July, there had been 611 positive COVID cases in GEO’s ICE facilities alone.

E. Defendants’ Materially False and Misleading Class Period Statements.57

106. Throughout the Class Period, Defendants were aware or severely reckless in not 

knowing that GEO’s operational deficiencies and contractual and legal violations – as increasingly 

highlighted by public and political scrutiny and numerous lawsuits – would cost the Company 

access to capital after its publicly disclosed financing partners bailed and revenue streams after 

multiple major government contracts were terminated. Defendants were also aware or severely 

57 For ease of reference, Plaintiffs have attached hereto a chart of the statements alleged to be false and/or

misleading as Appendix A. The particular portions of the statements alleged to be false and misleading 

are bold and italicized.

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reckless in not knowing that the lost financing partners and government contracts left GEO wholly 

unequipped to deal with COVID-19 in its facilities, which resulted in orders and/or guidelines 

from courts, governments and regulatory agencies materially reducing populations and thus 

materially less revenue for the Company.

107. On November 8, 2018, GEO filed a Quarterly Report on Form 10-Q with the 

SEC, reporting the Company’s financial and operating results for the quarter ended September 30, 

2018 (the “3Q18 10-Q”) which was “duly authorized” by CFO Evans. With respect to “Litigation, 

Claims and Assessments,” the 3Q18 10-Q stated, in relevant part:

On October 22, 2014, former civil immigration detainees at the Aurora Immigration 

Detention Center filed a class action lawsuit against the Company in the United States 

District Court for the District of Colorado (the “Court”). The complaint alleges that 

the Company was in violation of the Colorado Minimum Wages of Workers Act and 

the federal Trafficking Victims Protection Act (“TVPA”). The plaintiff class claims 

that the Company was unjustly enriched as a result of the level of payment the 

detainees received for work performed at the facility, even though the voluntary work 

program as well as the wage rates and standards associated with the program that are 

at issue in the case are authorized by the Federal government under guidelines 

approved by the United States Congress. On July 6, 2015, the Court found that 

detainees were not employees under the Colorado Minimum Wage Order and 

dismissed this claim. In February 2017, the Court granted the plaintiff-class’ motion 

for class certification which the Company appealed to the 10th Circuit Court of 

Appeals. On February 9, 2018, a three-judge panel of the appellate court affirmed the 

class-certification order. A petition for rehearing en banc was denied on March 7, 

2018. On October 2, 2018, the U.S. Supreme Court denied the Company’s petition for 

a writ of certiorari on the class certification order. The plaintiff class seeks actual 

damages, compensatory damages, exemplary damages, punitive damages, restitution, 

attorneys’ fees and costs, and such other relief as the Court may deem proper. In the 

time since the Colorado suit was initially filed, three similar lawsuits have been filed

– two in Washington and one in California. In Washington, one of the two lawsuits 

was filed on September 9, 2017 by immigration detainees against the Company in the

U.S. District Court for the Western District of Washington. The second was filed on 

September 20, 2017 by the State Attorney General against the Company in the 

Superior Court of the State of Washington for Pierce County, which the Company 

removed to the U.S. District Court for the Western District of Washington on October 

9, 2017. In California, a class-action lawsuit was filed on December 19, 2017 by 

immigration detainees against the Company in the U.S. District Court Eastern Division 

of the Central District of California. All three lawsuits allege violations of the 

respective state’s minimum wage laws. However, the California lawsuit, like the 

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Colorado suit, also includes claims based that the Company violated the TVPA and 

California’s equivalent state statute. The Company intends to take all necessary steps 

to vigorously defend itself and has consistently refuted the allegations and claims in 

these lawsuits. The Company has not recorded an accrual relating to these matters 

at this time, as a loss is not considered probable nor reasonably estimable at this 

stage of the lawsuit.

The nature of the Company’s business exposes it to various types of third-party legal 

claims or litigation against the Company, including, but not limited to, civil rights 

claims relating to conditions of confinement and/or mistreatment, sexual misconduct 

claims brought by prisoners or detainees, medical malpractice claims, product liability 

claims, intellectual property infringement claims, claims relating to employment 

matters (including, but not limited to, employment discrimination claims, union 

grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third 

parties, contractual claims and claims for personal injury or other damages resulting 

from contact with the Company’s facilities, programs, electronic monitoring products, 

personnel or prisoners, including damages arising from a prisoner’s escape or from a 

disturbance or riot at a facility. The Company does not expect the outcome of any 

pending claims or legal proceedings to have a material adverse effect on its financial 

condition, results of operations or cash flows. However, the results of these claims or 

proceedings cannot be predicted with certainty, and an unfavorable resolution of one 

or more of these claims or proceedings could have a material adverse effect on the 

Company’s financial condition, results of operations or cash flows.

108. The statements referenced in ¶ 107 regarding the Company’s legal accruals and 

the materiality of lawsuits against it were materially false and/or misleading because Defendants 

misrepresented and failed to disclose, knowingly or recklessly disregarded, that these series of 

cases alleging violations of the labor laws were “a potentially catastrophic risk to GEO’s ability to 

honor its contracts with the federal government” and exposed the Company to “tens of millions” 

in potential damages and as high as $20 million in legal expenses (¶¶ 59-60).

109. On February 14, 2019, during the Company’s fourth quarter 2018 (“4Q18”) 

earnings call, CFO Evans stated, “[d]uring the fourth quarter, we recognized -- reorganized our 

legal representation and strategy with respect to certain legal cases and incurred one-time legal 

transition expenses. We believe, we have adequately accounted for known legal cases in our 

guidance for 2019.”

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110. The statement referenced in ¶ 109 regarding GEO having “adequately accounted 

for known legal cases” was materially false and/or misleading because Defendants misrepresented 

and failed to disclose, knowingly or recklessly disregarded, that these series of cases alleging 

violations of the labor laws were “a potentially catastrophic risk to GEO’s ability to honor its 

contracts with the federal government” and exposed the Company to “tens of millions” in potential 

damages and as high as $20 million in legal expenses (¶¶ 59-60).

111. On February 25, 2019, GEO filed an Annual Report on Form 10-K with the SEC, 

reporting the Company’s financial and operating results for the year ended December 31, 2018 

(the “2018 10-K”). With respect to “Litigation, Claims and Assessments,” the 2018 10-K stated, 

in relevant part:

As previously reported and described in our prior periodic reports, including most 

recently in our Form 10-Q for the quarter ended June 30, 2018, on February 8, 2017, 

former civil immigration detainees at the Aurora Immigration Detention Center filed 

a class action lawsuit on October 22, 2014, against the Company in the United States 

District Court for the District of Colorado (the “Court”). The complaint alleges that 

the Company was in violation of the Colorado Minimum Wages of Workers Act and 

the federal Trafficking Victims Protection Act (“TVPA”). The plaintiff class claims 

that the Company was unjustly enriched because of the level of payment the detainees 

received for work performed at the facility, even though the voluntary work program 

as well as the wage rates and standards associated with the program that are at issue in 

the case are authorized by the Federal government under guidelines approved by the 

United States Congress. On July 6, 2015, the Court found that detainees were not 

employees under the Colorado Minimum Wage Order and dismissed this claim. In 

February 2017, the Court granted the plaintiff-class’ motion for class certification. The

plaintiff class seeks actual damages, compensatory damages, exemplary damages, 

punitive damages, restitution, attorneys’ fees and costs, and such other relief as the 

Court may deem proper. In the time since the Colorado suit was initially filed, three 

similar lawsuits have been filed — two in Washington and one in California. In 

Washington, one of the two lawsuits was filed on September 9, 2017 by immigration 

detainees against the Company in the U.S. District Court for the Western District of 

Washington. The second was filed on September 20, 2017 by the State Attorney 

General against the Company in the Superior Court of the State of Washington for 

Pierce County, which the Company removed to the U.S. District Court for the Western 

District of Washington on October 9, 2017. In California, a class-action lawsuit was 

filed on December 19, 2017 by immigration detainees against the Company in the U.S. 

District Court Eastern Division of the Central District of California. All three lawsuits 

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allege violations of the respective state’s minimum wage laws. However, the 

California lawsuit, like the Colorado suit, also includes claims based that the Company 

violated the TVPA and California’s equivalent state statute. The Company intends to 

take all necessary steps to vigorously defend itself and has consistently refuted the 

allegations and claims in these lawsuits. The Company has not recorded an accrual 

relating to these matters at this time, as a loss is not considered probable nor 

reasonably estimable at this stage of the lawsuit.

The nature of the Company’s business exposes it to various types of third-party legal 

claims or litigation against the Company, including, but not limited to, civil rights 

claims relating to conditions of confinement and/or mistreatment, sexual misconduct 

claims brought by prisoners or detainees, medical malpractice claims, product liability 

claims, intellectual property infringement claims, claims relating to employment 

matters (including, but not limited to, employment discrimination claims, union 

grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third 

parties, contractual claims and claims for personal injury or other damages resulting 

from contact with the Company’s facilities, programs, electronic monitoring products, 

personnel or prisoners, including damages arising from a prisoner’s escape or from a 

disturbance or riot at a facility. The Company accrues for legal costs associated with 

loss contingencies when those costs are probable and reasonably estimable. The 

Company does not expect the outcome of any pending claims or legal proceedings 

to have a material adverse effect on its financial condition, results of operations or 

cash flows.

112. The statements referenced in ¶ 111 regarding the Company’s legal accruals and 

the materiality of lawsuits against it were materially false and/or misleading because Defendants 

misrepresented and failed to disclose, knowingly or recklessly disregarded, that these series of 

cases alleging violations of the labor laws were “a potentially catastrophic risk to GEO’s ability to 

honor its contracts with the federal government” and exposed the Company to “tens of millions”

in potential damages and as high as $20 million in legal expenses (¶¶ 59-60).

113. On May 6, 2019, GEO filed a Quarterly Report on Form 10-Q with the SEC, 

reporting the Company’s financial and operating results for the quarter ended March 31, 2019 (the 

“1Q19 10-Q”) which was “duly authorized” by CFO Evans. With respect to “Litigation, Claims 

and Assessments,” the 1Q19 10-Q stated, in relevant part:

As previously reported and described in the Company’s prior periodic reports, 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 43 of 88
44

including most recently in our Form 10-K for the year ended December 31, 2018, 

on February 8, 2017, former civil immigration detainees at the Aurora Immigration 

Detention Center filed a class action lawsuit on October 22, 2014, against the 

Company in the United States District Court for the District of Colorado (the 

“Court”). The complaint alleges that the Company was in violation of the Colorado 

Minimum Wages of Workers Act and the federal Trafficking Victims Protection 

Act (“TVPA”). The plaintiff class claims that the Company was unjustly enriched

because of the level of payment the detainees received for work performed at the 

facility, even though the voluntary work program as well as the wage rates and 

standards associated with the program that are at issue in the case are authorized by 

the Federal government under guidelines approved by the United States Congress. 

On July 6, 2015, the Court found that detainees were not employees under the 

Colorado Minimum Wage Order and dismissed this claim. In February 2017, the 

Court granted the plaintiff-class’ motion for class certification. The plaintiff class 

seeks actual damages, compensatory damages, exemplary damages, punitive 

damages, restitution, attorneys’ fees and costs, and such other relief as the Court 

may deem proper. In the time since the Colorado suit was initially filed, three 

similar lawsuits have been filed - two in Washington and one in California. In 

Washington, one of the two lawsuits was filed on September 9, 2017 by 

immigration detainees against the Company in the U.S. District Court for the 

Western District of Washington. The second was filed on September 20, 2017 by 

the State Attorney General against the Company in the Superior Court of the State 

of Washington for Pierce County, which the Company removed to the U.S. District 

Court for the Western District of Washington on October 9, 2017. In California, a 

class-action lawsuit was filed on December 19, 2017 by immigration detainees 

against the Company in the U.S. District Court Eastern Division of the Central 

District of California. All three lawsuits allege violations of the respective state’s 

minimum wage laws. However, the California lawsuit, like the Colorado suit, also 

includes claims that the Company violated the TVPA and California’s equivalent 

state statute. The Company intends to take all necessary steps to vigorously defend 

itself and has consistently refuted the allegations and claims in these lawsuits. The 

Company has not recorded an accrual relating to these matters at this time, as a 

loss is not considered probable nor reasonably estimable at this stage of the 

lawsuit.

The nature of the Company’s business exposes it to various types of third-party 

legal claims or litigation against the Company, including, but not limited to, civil 

rights claims relating to conditions of confinement and/or mistreatment, sexual 

misconduct claims brought by prisoners or detainees, medical malpractice claims, 

product liability claims, intellectual property infringement claims, claims relating 

to employment matters (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, 

environmental claims, automobile liability claims, indemnification claims by its 

customers and other third parties, contractual claims and claims for personal injury 

or other damages resulting from contact with the Company’s facilities, programs, 

electronic monitoring products, personnel or prisoners, including damages arising 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 44 of 88
45

from a prisoner’s escape or from a disturbance or riot at a facility. The Company 

does not expect the outcome of any pending claims or legal proceedings to have 

a material adverse effect on its financial condition, results of operations or cash 

flows. However, the results of these claims or proceedings cannot be predicted with 

certainty, and an unfavorable resolution of one or more of these claims or 

proceedings could have a material adverse effect on the Company’s financial 

condition, results of operations or cash flows.

114. The statements referenced in ¶ 113 regarding the Company’s legal accruals and 

the materiality of lawsuits against it were materially false and/or misleading because Defendants 

misrepresented and failed to disclose, knowingly or recklessly disregarded, that these series of 

cases alleging violations of the labor laws were “a potentially catastrophic risk to GEO’s ability to 

honor its contracts with the federal government” and exposed the Company to “tens of millions” 

in potential damages and as high as $20 million in legal expenses (¶¶ 59-60).

115. On August 2, 2019, GEO filed a Quarterly Report on Form 10-Q with the SEC, 

reporting the Company’s financial and operating results for the quarter ended June 30, 2019 (the 

“2Q19 10-Q”) which was “duly authorized” by CFO Evans. With respect to “Litigation, Claims 

and Assessments,” the 2Q19 10-Q stated, in relevant part:

As previously reported and described in the Company’s prior periodic reports, 

including most recently in our Form 10-Q for the quarter ended March 31, 2019, 

former civil immigration detainees at the Aurora Immigration Processing Center 

filed a class action lawsuit on October 22, 2014, against the Company in the United 

States District Court for the District of Colorado (the “Court”). The complaint 

alleges that the Company was in violation of the Colorado Minimum Wages of 

Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The 

plaintiff class claims that the Company was unjustly enriched because of the level 

of payment the detainees received for work performed at the facility, even though 

the voluntary work program as well as the wage rates and standards associated with 

the program that are at issue in the case are authorized by the Federal government 

under guidelines approved by the United States Congress. On July 6, 2015, the 

Court found that detainees were not employees under the Colorado Minimum Wage 

Order and dismissed this claim. In February 2017, the Court granted the plaintiffclass’ motion for class certification. The plaintiff class seeks actual damages, 

compensatory damages, exemplary damages, punitive damages, restitution, 

attorneys’ fees and costs, and such other relief as the Court may deem proper. In 

the time since the Colorado suit was initially filed, three similar lawsuits have been 

filed - two in Washington and one in California. In Washington, one of the two 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 45 of 88
46

lawsuits was filed on September 9, 2017 by immigration detainees against the 

Company in the U.S. District Court for the Western District of Washington. The 

second was filed on September 20, 2017 by the State Attorney General against the 

Company in the Superior Court of the State of Washington for Pierce County, 

which the Company removed to the U.S. District Court for the Western District of 

Washington on October 9, 2017. In California, a class-action lawsuit was filed on 

December 19, 2017 by immigration detainees against the Company in the U.S. 

District Court Eastern Division of the Central District of California. All three 

lawsuits allege violations of the respective state’s minimum wage laws. However, 

the California lawsuit, like the Colorado suit, also includes claims that the Company 

violated the TVPA and California's equivalent state statute. On July 2, 2019, the 

Company filed a Motion for Summary Judgment in the Washington Attorney 

General’s Tacoma lawsuit based on the Company’s position that its legal defenses 

prevent the case from proceeding to trial. The Company intends to take all 

necessary steps to vigorously defend itself and has consistently refuted the 

allegations and claims in these lawsuits. The Company has not recorded an 

accrual relating to these matters at this time, as a loss is not considered probable 

nor reasonably estimable at this stage of the lawsuits. We establish accruals for 

specific legal proceedings when it is considered probable that a loss has been 

incurred and the amount of the loss can be reasonably estimated. However, the 

results of these claims or proceedings cannot be predicted with certainty, and an 

unfavorable resolution of one or more of these claims or proceedings could have a 

material adverse effect on the Company’s financial condition, results of operations 

or cash flows. Our accruals for loss contingencies are reviewed quarterly and 

adjusted as additional information becomes available. We do not accrue for 

anticipated legal fees and costs, but expense those items as incurred.

The nature of the Company’s business exposes it to various types of third-party 

legal claims or litigation against the Company, including, but not limited to, civil 

rights claims relating to conditions of confinement and/or mistreatment, sexual 

misconduct claims, medical malpractice claims, claims relating to the TVPA, 

product liability claims, intellectual property infringement claims, claims relating 

to employment laws (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, 

environmental claims, automobile liability claims, indemnification claims by its 

customers and other third parties, contractual claims and claims for personal injury 

or other damages resulting from contact with the Company's facilities, programs, 

electronic monitoring products, personnel, inmates or detainees, including damages 

arising from an escape or from a disturbance or riot at a facility. Expenses 

associated with legal proceedings may fluctuate from quarter to quarter based on 

the level of activity required during the different stages of legal proceedings, new 

developments that arise in the course of the legal proceedings, and the Company’s 

litigation strategy. The Company does not expect the outcome of any pending 

claims or legal proceedings to have a material adverse effect on its financial 

condition, results of operations or cash flows. However, the results of these claims 

or proceedings cannot be predicted with certainty, and an unfavorable resolution of 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 46 of 88
47

one or more of these claims or proceedings could have a material adverse effect on 

the Company’s financial condition, results of operations or cash flows.

116. The statements referenced in ¶ 115 regarding the Company’s legal accruals and 

the materiality of lawsuits against it were materially false and/or misleading because Defendants 

misrepresented and failed to disclose, knowingly or recklessly disregarded, that these series of 

cases alleging violations of the labor laws were “a potentially catastrophic risk to GEO’s ability 

to honor its contracts with the federal government” and exposed the Company to “tens of 

millions” in potential damages and as high as $20 million in legal expenses (¶¶ 59-60).

117. On November 7, 2019, GEO filed a Quarterly Report on Form 10-Q with the 

SEC, reporting the Company’s financial and operating results for the quarter ended September 30, 

2019 (the “3Q19 10-Q”) which was “duly authorized” by CFO Evans. With respect to “Litigation, 

Claims and Assessments,” the 3Q19 10-Q stated, in relevant part:

As previously reported and described in the Company's prior periodic reports, 

including most recently in our Form 10-Q for the quarter ended June 30, 2019, 

former civil immigration detainees at the Aurora Immigration Processing Center 

filed a class action lawsuit on October 22, 2014, against the Company in the United 

States District Court for the District of Colorado (the “Court”). The complaint 

alleges that the Company was in violation of the Colorado Minimum Wages of 

Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The 

plaintiff class claims that the Company was unjustly enriched because of the level 

of payment the detainees received for work performed at the facility, even though 

the voluntary work program as well as the wage rates and standards associated with

the program that are at issue in the case are authorized by the Federal government 

under guidelines approved by the United States Congress. On July 6, 2015, the 

Court found that detainees were not employees under the Colorado Minimum Wage 

Order and dismissed this claim. In February 2017, the Court granted the plaintiffclass’ motion for class certification on the TVPA and unjust enrichment claims. 

The plaintiff class seeks actual damages, compensatory damages, exemplary 

damages, punitive damages, restitution, attorneys’ fees and costs, and such other 

relief as the Court may deem proper. In the time since the Colorado suit was initially 

filed, three similar lawsuits have been filed - two in Washington and one in 

California. In Washington, one of the two lawsuits was filed on September 9, 2017 

by immigration detainees against the Company in the U.S. District Court for the 

Western District of Washington. The second lawsuit was filed on September 20, 

2017 by the State Attorney General against the Company in the Superior Court of 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 47 of 88
48

the State of Washington for Pierce County, which the Company removed to the

U.S. District Court for the Western District of Washington on October 9, 2017. In 

California, a class-action lawsuit was filed on December 19, 2017 by immigration 

detainees against the Company in the U.S. District Court Eastern Division of the 

Central District of California. All three lawsuits allege violations of the respective 

state’s minimum wage laws. However, the California lawsuit, like the Colorado 

suit, also includes claims that the Company violated the TVPA and California’s 

equivalent state statute. On September 27, 2019, the California plaintiff class filed 

a motion for class certification of both California-based and nationwide classes. 

The Company filed a response to this motion disputing the plaintiff class’ right to 

broad class treatment of the claims at issue. On July 2, 2019, the Company filed a 

Motion for Summary Judgment in the Washington Attorney General’s Tacoma 

lawsuit based on the Company’s position that its legal defenses prevent the case 

from proceeding to trial. The federal court in Washington denied the Company’s 

Motion for Summary Judgment on August 6, 2019. However, on August 20, 2019, 

the Department of Justice filed a Statement of Interest, which asked the Washington 

court to revisit its prior denial of the Company’s intergovernmental immunity 

defense in the case. While the Washington court ultimately elected not to dismiss 

the case at the time, its order importantly declared that the Company’s 

intergovernmental immunity defense was legally viable, to be ultimately 

determined at trial. The two Washington cases are currently set for trial in March 

2020. The Company intends to take all necessary steps to vigorously defend itself

and has consistently refuted the allegations and claims in these lawsuits. The 

Company has not recorded an accrual relating to these matters at this time, as a 

loss is not considered probable nor reasonably estimable at this stage of the 

lawsuits. The Company establishes accruals for specific legal proceedings when it 

is considered probable that a loss has been incurred and the amount of the loss can 

be reasonably estimated. However, the results of these claims or proceedings cannot 

be predicted with certainty, and an unfavorable resolution of one or more of these 

claims or proceedings could have a material adverse effect on the Company’s 

financial condition, results of operations or cash flows. Our accruals for loss 

contingencies are reviewed quarterly and adjusted as additional information

becomes available. We do not accrue for anticipated legal fees and costs, but 

expense those items as incurred.

The nature of the Company’s business exposes it to various types of third-party 

legal claims or litigation against the Company, including, but not limited to, civil 

rights claims relating to conditions of confinement and/or mistreatment, sexual 

misconduct claims, medical malpractice claims, claims relating to the TVPA, 

product liability claims, intellectual property infringement claims, claims relating 

to employment laws (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, 

environmental claims, automobile liability claims, indemnification claims by its 

customers and other third parties, contractual claims and claims for personal injury 

or other damages resulting from contact with the Company’s facilities, programs, 

electronic monitoring products, personnel, inmates or detainees, including damages 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 48 of 88
49

arising from an escape or from a disturbance or riot at a facility. Expenses 

associated with legal proceedings may fluctuate from quarter to quarter based on 

the level of activity required during the different stages of legal proceedings, new

developments that arise in the course of the legal proceedings, and the Company’s 

litigation strategy. The Company does not expect the outcome of any pending 

claims or legal proceedings to have a material adverse effect on its financial 

condition, results of operations or cash flows. However, the results of these claims 

or proceedings cannot be predicted with certainty, and an unfavorable resolution of 

one or more of these claims or proceedings could have a material adverse effect on 

the Company's financial condition, results of operations or cash flows.

118. The statements referenced in ¶ 117 regarding the Company’s legal accruals and 

the materiality of lawsuits against it were materially false and/or misleading because Defendants 

misrepresented and failed to disclose, knowingly or recklessly disregarded, that these series of 

cases alleging violations of the labor laws were “a potentially catastrophic risk to GEO’s ability to 

honor its contracts with the federal government” and exposed the Company to “tens of millions” 

in potential damages and as high as $20 million in legal expenses (¶¶ 59-60).

119. On February 26, 2020, GEO filed an Annual Report on Form 10-K with the SEC, 

reporting the Company’s financial and operating results for the quarter ended December 31, 2019 

(the “2019 10-K”). With respect to “Litigation, Claims and Assessments,” the 2019 10-K stated, 

in relevant part:

As previously reported and described in the Company’s prior periodic reports, 

including most recently in its Form 10-Q for the quarter ended September 30, 2019,

former civil immigration detainees at the Aurora Immigration Processing Center 

filed a class action lawsuit on October 22, 2014, against the Company in the United 

States District Court for the District of Colorado (the “Court”). The complaint 

alleges that the Company was in violation of the Colorado Minimum Wages of 

Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The 

plaintiff class claims that the Company was unjustly enriched because of the level 

of payment the detainees received for work performed at the facility, even though 

the voluntary work program as well as the wage rates and standards associated with 

the program that are at issue in the case are authorized by the Federal government 

under guidelines approved by the United States Congress. On July 6, 2015, the 

Court found that detainees were not employees under the Colorado Minimum Wage 

Order and dismissed this claim. In February 2017, the Court granted the plaintiffclass’ motion for class certification on the TVPA and unjust enrichment claims. 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 49 of 88
50

The plaintiff class seeks actual damages, compensatory damages, exemplary 

damages, punitive damages, restitution, attorneys’ fees and costs, and such other 

relief as the Court may deem proper. In the time since the Colorado suit was initially 

filed, three similar lawsuits have been filed - two in Washington and one in 

California. In Washington, one of the two lawsuits was filed on September 9, 2017 

by immigration detainees against the Company in the U.S. District Court for the 

Western District of Washington. The second lawsuit was filed on September 20, 

2017 by the State Attorney General against the Company in the Superior Court of 

the State of Washington for Pierce County, which the Company removed to the

U.S. District Court for the Western District of Washington on October 9, 2017. In 

California, a class-action lawsuit was filed on December 19, 2017 by immigration 

detainees against the Company in the U.S. District Court Eastern Division of the 

Central District of California. All three lawsuits allege violations of the respective 

state’s minimum wage laws. However, the California lawsuit, like the Colorado 

suit, also includes claims that the Company violated the TVPA and California’s 

equivalent state statute. On September 27, 2019, the California plaintiff class filed 

a motion for class certification of both California-based and nationwide classes. 

The Company filed a response to this motion disputing the plaintiff class’ right to 

broad class treatment of the claims at issue. On July 2, 2019, the Company filed a 

Motion for Summary Judgment in the Washington Attorney General’s Tacoma 

lawsuit based on the Company’s position that its legal defenses prevent the case 

from proceeding to trial. The federal court in Washington denied the Company’s 

Motion for Summary Judgment on August 6, 2019. However, on August 20, 2019, 

the Department of Justice filed a Statement of Interest, which asked the Washington 

court to revisit its prior denial of the Company's intergovernmental immunity 

defense in the case. While the Washington court ultimately elected not to dismiss 

the case at the time, its order importantly declared that the Company's 

intergovernmental immunity defense was legally viable, to be ultimately 

determined at trial. The two Washington cases are currently set for trial in April 

2020. The Company intends to take all necessary steps to vigorously defend itself 

and has consistently refuted the allegations and claims in these lawsuits. The 

Company has not recorded an accrual relating to these matters at this time, as a 

loss is not considered probable nor reasonably estimable at this stage of the

lawsuits. The Company establishes accruals for specific legal proceedings when it 

is considered probable that a loss has been incurred and the amount of the loss can 

be reasonably estimated. However, the results of these claims or proceedings cannot 

be predicted with certainty, and an unfavorable resolution of one or more of these 

claims or proceedings could have a material adverse effect on the Company’s 

financial condition, results of operations or cash flows. The Company’s accruals 

for loss contingencies are reviewed quarterly and adjusted as additional information 

becomes available. The Company does not accrue for anticipated legal fees and 

costs but expenses those items as incurred.

On December 30, 2019, GEO filed a lawsuit for declaratory and injunctive relief 

challenging California’s newly enacted law - Assembly Bill 32 (AB-32) - which 

bars the federal government from engaging GEO or any other government 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 50 of 88
51

contractors to provide detention services for illegal aliens. GEO’s claims, as 

described in the lawsuit, are grounded in authoritative legal doctrine that under the 

Constitution’s Supremacy Clause, the federal government is free from regulation 

by any state. By prohibiting federal detention facilities in California, the lawsuit 

argues AB-32 substantially interferes with the ability of USMS and ICE to carry 

out detention responsibilities for the federal government. Secondly, because AB32 creates exceptions to the State when using GEO or any government contractors 

(to alleviate overcrowding), California’s statute unlawfully discriminates against 

the federal government. On December 31, 2019, GEO filed its motion for a 

preliminary injunction restraining California’s Governor and Attorney General 

from enforcing AB-32 against GEO’s detention facilities on behalf of USMS and 

ICE.

The nature of the Company’s business exposes it to various types of third-party 

legal claims or litigation against the Company, including, but not limited to, civil 

rights claims relating to conditions of confinement and/or mistreatment, sexual 

misconduct claims brought by prisoners or detainees, medical malpractice claims, 

product liability claims, intellectual property infringement claims, claims relating 

to employment matters (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, 

environmental claims, automobile liability claims, indemnification claims by its 

customers and other third parties, contractual claims and claims for personal injury 

or other damages resulting from contact with the Company’s facilities, programs, 

electronic monitoring products, personnel or prisoners, including damages arising 

from a prisoner’s escape or from a disturbance or riot at a facility. The Company 

accrues for legal costs associated with loss contingencies when those costs are 

probable and reasonably estimable. The Company does not expect the outcome of 

any pending claims or legal proceedings to have a material adverse effect on its 

financial condition, results of operations or cash flows.

120. The statements referenced in ¶ 119 regarding the Company’s legal accruals and 

the materiality of lawsuits against it were materially false and/or misleading because Defendants

misrepresented and failed to disclose, knowingly or recklessly disregarded, (i) that these series of 

cases alleging violations of the labor laws were “a potentially catastrophic risk to GEO’s ability to 

honor its contracts with the federal government” and exposed the Company to “tens of millions” 

in potential damages and as high as $20 million in legal expenses (¶¶ 59-60) and (ii) that if forced 

to close its facilities by AB-32, GEO “would lose an average of $250 million a year in revenue 

over the next 15 years, plus the $300 million invested in acquiring and setting up those buildings” 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 51 of 88
52

(¶135). 

121. On May 6, 2020, GEO filed a Quarterly Report on Form 10-Q with the SEC, 

reporting the Company’s financial and operating results for the quarter ended March 31, 2020 (the

“1Q20 10-Q”) which was “duly authorized” by CFO Evans. With respect to “Litigation, Claims 

and Assessments,” the 1Q20 10-Q stated, in relevant part:

As previously reported and described in the Company's prior periodic reports, 

including most recently in its Form 10-K for the year ended December 31, 2019, 

former civil immigration detainees at the Aurora Immigration Processing Center 

filed a class action lawsuit on October 22, 2014, against the Company in the United 

States District Court for the District of Colorado (the “Court”). The complaint 

alleges that the Company was in violation of the Colorado Minimum Wages of 

Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The 

plaintiff class claims that the Company was unjustly enriched because of the level 

of payment the detainees received for work performed at the facility, even though 

the voluntary work program as well as the wage rates and standards associated with 

the program that are at issue in the case are authorized by the Federal government 

under guidelines approved by the United States Congress. On July 6, 2015, the 

Court found that detainees were not employees under the Colorado Minimum Wage 

Order and dismissed this claim. In February 2017, the Court granted the plaintiffclass’ motion for class certification on the TVPA and unjust enrichment claims. 

The plaintiff class seeks actual damages, compensatory damages, exemplary 

damages, punitive damages, restitution, attorneys’ fees and costs, and such other 

relief as the Court may deem proper. In the time since the Colorado suit was initially 

filed, three similar lawsuits have been filed - two in Washington and one in 

California. In Washington, one of the two lawsuits was filed on September 9, 2017 

by immigration detainees against the Company in the U.S. District Court for the 

Western District of Washington. The second lawsuit was filed on September 20, 

2017 by the State Attorney General against the Company in the Superior Court of 

the State of Washington for Pierce County, which the Company removed to the 

U.S. District Court for the Western District of Washington on October 9, 2017. In 

California, a class- action lawsuit was filed on December 19, 2017 by immigration 

detainees against the Company in the U.S. District Court Eastern Division of the 

Central District of California. All three lawsuits allege violations of the respective 

state’s minimum wage laws. However, the California lawsuit, like the Colorado 

suit, also includes claims that the Company violated the TVPA and California's 

equivalent state statute. On September 27, 2019, the California plaintiff class filed 

a motion for class certification of both California-based and nationwide classes. 

The Company filed a response to this motion disputing the plaintiff class’ right to 

broad class treatment of the claims at issue. On July 2, 2019, the Company filed a 

Motion for Summary Judgment in the Washington Attorney General’s Tacoma 

lawsuit based on the Company’s position that its legal defenses prevent the case 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 52 of 88
53

from proceeding to trial. The federal court in Washington denied the Company’s 

Motion for Summary Judgment on August 6, 2019. However, on August 20, 2019, 

the Department of Justice filed a Statement of Interest, which asked the Washington 

court to revisit its prior denial of the Company’s intergovernmental immunity 

defense in the case. While the Washington court ultimately elected not to dismiss 

the case at the time, its order importantly declared that the Company’s 

intergovernmental immunity defense was legally viable, to be ultimately 

determined at trial. Trial for the two Washington cases has been continued until 

sometime past June 2020. The Company intends to take all necessary steps to 

vigorously defend itself and has consistently refuted the allegations and claims in 

these lawsuits. The Company has not recorded an accrual relating to these 

matters at this time, as a loss is not considered probable nor reasonably estimable 

at this stage of the lawsuits. The Company establishes accruals for specific legal 

proceedings when it is considered probable that a loss has been incurred and the 

amount of the loss can be reasonably estimated. However, the results of these 

claims or proceedings cannot be predicted with certainty, and an unfavorable 

resolution of one or more of these claims or proceedings could have a material 

adverse effect on the Company’s financial condition, results of operations or cash 

flows. The Company’s accruals for loss contingencies are reviewed quarterly and 

adjusted as additional information becomes available. The Company does not 

accrue for anticipated legal fees and costs but expenses those items as incurred.

On December 30, 2019, GEO filed a lawsuit for declaratory and injunctive relief 

challenging California’s newly enacted law - Assembly Bill 32 (AB-32) - which 

bars the federal government from engaging GEO or any other government 

contractors to provide detention services for illegal aliens. GEO’s claims, as 

described in the lawsuit, are grounded in authoritative legal doctrine that under the 

Constitution’s Supremacy Clause, the federal government is free from regulation 

by any state. By prohibiting federal detention facilities in California, the lawsuit 

argues AB-32 substantially interferes with the ability of U.S. Marshals Service 

(“USMS”) and ICE to carry out detention responsibilities for the federal 

government. Secondly, because AB-32 creates exceptions to the State when using 

GEO or any government contractors (to alleviate overcrowding), California’s 

statute unlawfully discriminates against the federal government. On December 31, 

2019, GEO filed its motion for a preliminary injunction restraining California’s 

Governor and Attorney General from enforcing AB-32 against GEO’s detention 

facilities on behalf of USMS and ICE. The court granted the parties’ joint motion 

to reschedule the hearing to July 16, 2020.

The nature of the Company’s business exposes it to various types of third-party 

legal claims or litigation against the Company, including, but not limited to, civil 

rights claims relating to conditions of confinement and/or mistreatment, sexual 

misconduct claims brought by prisoners or detainees, medical malpractice claims, 

product liability claims, intellectual property infringement claims, claims relating 

to employment matters (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, 

environmental claims, automobile liability claims, indemnification claims by its 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 53 of 88
54

customers and other third parties, contractual claims and claims for personal injury 

or other damages resulting from contact with the Company’s facilities, programs, 

electronic monitoring products, personnel or prisoners, including damages arising 

from a prisoner’s escape or from a disturbance or riot at a facility. The Company 

accrues for legal costs associated with loss contingencies when those costs are 

probable and reasonably estimable. The Company does not expect the outcome of 

any pending claims or legal proceedings to have a material adverse effect on its 

financial condition, results of operations or cash flows.

122. The statements referenced in ¶ 121 regarding the Company’s legal accruals and 

the materiality of lawsuits against it were materially false and/or misleading because Defendants 

misrepresented and failed to disclose, knowingly or recklessly disregarded, (i) that these series of 

cases alleging violations of the labor laws were “a potentially catastrophic risk to GEO’s ability to 

honor its contracts with the federal government” and exposed the Company to “tens of millions” 

in potential damages and as high as $20 million in legal expenses (¶¶ 59-60) and (ii) that if forced 

to close its facilities by AB-32, GEO “would lose an average of $250 million a year in revenue 

over the next 15 years, plus the $300 million invested in acquiring and setting up those buildings” 

(¶ 135).

F. The Truth Slowly Emerges

123. Before the market opened on March 5, 2019, Bloomberg published an article 

entitled “JPMorgan Ends Financing of Private Prisons After Criticism,” announcing that as part of 

JPMorgan’s “robust and well-established process to evaluate the sectors that [it] serve[s],” it would 

“no longer bank the private prison-industry,” including GEO and CoreCivic. Reuters also reported 

that “JPMorgan Chase & Co has decided to stop financing private operators of prisons and 

detention centers, which have become targets of protests over Trump administration policies.” 

Other major news outlets ran similar articles over the next couple days, including The New York 

Times on March 6, 2019.

124. Then, on March 10, 2019, U.S. Bank told the Washington Post that it had reduced 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 54 of 88
55

its credit exposure to GEO and CoreCivic to “an immaterial amount” and on March 12, 2019, 

during congressional testimony, in response to Congresswoman Ocasio-Cortez asking why WF

was financing companies “involved with the caging of children,” WF CEO Sloan responded that 

it “will exit that relationship.”

125. On these revelations, indicating that the Company’s dividend payments may be no 

longer predictable or stable without its usual long-term financing partners, GEO’s share price fell 

over 11%, or $2.58 per share, to close at $20.35 per share on March 8, 2019 after three days of 

heavy trading, and another 5.0%, or $1.03 per share, to close at $19.43 per share on March 14, 

2019 after two days of heavy trading.

126. As Forbes reported on March 15, 2019, “[t]he stocks of private prison leaders 

GEO Group and CoreCivic are down 16% and 8%, respectively today since last Tuesday — the 

day when the country’s largest bank, JPMorgan, publicly announced that they will take their 

money out of the private prison industry.”

127. Before the market opened on July 11, 2019, NBC News published an article titled 

“House Democrats seek documents from for-profit companies detaining migrants.” On this news, 

indicating political pressure on for-profit prisons, GEO’s share price fell over 6.5%, or $1.33 per 

share, to close at $18.97 per share on July 11, 2019 after a heavy day of trading.

128. Then, on July 17, 2019, after the market opened, reputable news sources published 

articles such as “GEO Wants Taxpayers to Foot Bill for Private Prison Exploitation,” revealing 

GEO’s pleas to ICE to help cover litigation costs stating in relevant part, “GEO cannot bear the 

costs of this defense on its own” and “[w]e urgently implore DOJ to take over the defense of these 

lawsuits and reimburse GEO for its costs.” On this news, indicating the Company’s serious 

concern that these lawsuits could have a material effect on its financial condition, results of 

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operations or cash flow, GEO’s share price fell over 7.9%, or $1.48 per share, to close at $17.24 

per share on July 19, 2019 after two days of heavy trading.

129. After the market closed on March 9, 2020, a request for information to GEO about 

the policies and procedures it had “in place to prepare for and manage a potential spread of the 

novel coronavirus among federal prisoners in GEO’s custody and among correctional staff at GEO 

facilities” from Senators Elizabeth Warren, Edward J. Markey, Brian Schatz, Cory A. Booker, 

Amy Klobucher, Tammy Baldwin, Bernard Sanders, Richard Blumenthal, Jeffrey A. Merkley, 

Chris Van Hollen, Kamala D. Harris, Sherrod Brown, Mazie K. Hirono, Tina Smith and Mark R. 

Warner (“3/9/20 Senators’ Letter”) was published on Senator Warren’s website. Quoting a March 

2, 2020 open letter signed by over 450 public health and legal experts and organizations, the 3/9/20 

Senators’ Letter stated that “incarcerated individuals ‘are at special risk of infection, given their 

living situations,’ and ‘may also be less able to participate in proactive measures to keep 

themselves safe, and infection control is challenging in these settings.’”

130. On the next day, March 10, 2020, the Philadelphia Inquirer reported that after two 

decades of operating the Delaware County Prison, Pennsylvania’s only privatized county prison, 

GEO suggested December 31, 2020 as the termination date of its current five-year, $259 million 

contract. GEO’s request came after Delaware County took the preliminary step toward ending the 

contract in February 2020 by voting to commission a study on what was needed to transition the 

Delaware County Prison back to being publicly run.

131. In response to the revelation on March 9 regarding the special risk of COVID-19 

in GEO’s facilities and on March 10 regarding GEO’s loss of a contract worth over $200 million 

in future revenue, the Company’s share price plummeted over 29% after two days of heavy trading. 

As reported on March 11, 2020, because “[p]eople held in immigration detention centers may be 

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particularly vulnerable to the new coronavirus as it spreads across the U.S.,” immigration 

attorneys questioned whether such centers – including the GEO-operated Aurora Facility,

Adelanto Facility and Karnes family detention center in Texas were prepared to safeguard 

detainees’ health and access to counsel.58

132. Before the market opened on June 17, 2020, CoreCivic announced that its Board 

of Directors was reevaluating its “corporate structure and capital allocation alternatives” and 

“suspend[ing] the Company’s quarterly dividend.” The revelation that CoreCivic was suspending 

its dividend and may be dropping its REIT structure indicated that GEO likely would also be 

suspending or at least cutting its dividend.

133. In addition, The Intercept published an article during pre-market hours on June 

17, 2020 entitled “GEO Group’s Blundering Response to the Pandemic Helped Spread 

Coronavirus in Halfway Houses.” The article reported details of a significant COVID-19 outbreak 

at the Grossman Center, a halfway house operated by GEO in Leavenworth, Kansas which “was 

for weeks the hardest hit federal halfway house in the country” in terms of confirmed COVID-19 

cases. Citing interviews with residents of the Grossman Center, The Intercept reported “that the 

virus spread not in spite of the facility’s efforts to contain it, but because of it” and that GEO’s 

“blundering” response included keeping residents in overcrowded conditions without enforcing 

personal protective measures even as COVID-19 diagnoses at the facility increased.

134. In response to the news about the suspension of CoreCivic’s dividend, the 

coronavirus outbreaks in GEO’s facilities, and GEO’s mishandling of the pandemic, the 

Company’s stock price fell over 10%, or $1.37 per share, to close at $11.83 per share on June 19, 

2020 after two days of heavy trading.

58 Suzanne Monyak, Attys Fear Coronavirus Spread In Immigration Detention, LAW360 (Mar. 11, 2020),

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135. On July 16, 2020, major news sources including the LA Times reported that a 

federal judge had issued a tentative ruling that largely upheld California’s ban on private prison

contracts, Assembly Bill (“AB”) 32, concluding that “AB 32 does not unconstitutionally 

discriminate against the federal government or its contractors.” If forced to close its facilities by 

AB-32, GEO claimed “it would lose an average of $250 million a year in revenue over the next 15 

years, plus the $300 million invested in acquiring and setting up those buildings.” Several other 

major news sources published related articles that day and the next.

136. On this news, GEO’s stock price fell over 5.4% or $0.66 per share, to close at

$11.49 per share on July 17, 2020 after two days of heavy trading.

137. On August 6, 2020, major news sources began reporting that a federal court had 

ordered GEO and ICE to conduct weekly, rapid-result COVID-19 tests at the Mesa Verde Facility 

and found that authorities had shown “deliberate indifference to the risk of an outbreak” of 

COVID-19 over their arguments regarding insufficient testing supplies. The court further noted 

that authorities had “avoided widespread testing . . . not for lack of tests, but for fear that positive 

test results would require them to implement safety measures that they apparently felt were not 

worth the trouble.” Several major news sources published related articles that day and the next.

138. Then, before the market opened on August 6, 2020, the full truth was revealed 

when GEO announced a nearly 30% reduction in its quarterly dividend from $0.48 per share to 

$0.34 per share – just enough to allow GEO to remain structured as a publicly traded REIT. In 

response to the news confirming GEO’s cavalier approach to inmate health in the face of COVID19 and announcing the dividend cut, GEO’s stock price fell $0.77 per share, or nearly 7%, to close

at $10.67 per share on August 7, 2020 after two days of heavy trading.

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V. ADDITIONAL ALLEGATIONS SUPPORTING SCIENTER

139. Defendants’ material misstatements and omissions, as alleged above, were made 

intentionally, knowingly, and/or with deliberate recklessness. Those material misstatements and 

omissions had the purpose and effect of concealing the adverse truth about GEO’s true operations,

performance, finances, and prospects from the investing public, consequently buoying and 

artificially inflating the trading price of GEO’s common stock. In addition to the foregoing 

allegations which adequately demonstrate scienter alone, the following facts, further demonstrate 

the strong inference that Defendants’ false statements and material omissions were made with 

actual knowledge of their falsity or with severe recklessness, i.e., scienter.

140. First, in a letter sent in the middle of the Class Period to the Chairman of the SEC, 

Warren has already accused GEO’s executives, including Defendant Zoley, of having direct 

knowledge of, while misrepresenting to investors, the financial issues arising from the operational 

deficiencies and increasing scrutiny faced by GEO:

Despite significant ongoing legal concerns, GEO has made a series of public 

statements through earnings calls and filings with the Securities and Exchange 

Commission (SEC) that differ dramatically from the non-public communications 

by corporate executives.

That letter, without more, establishes that GEO’s executives had knowledge—i.e., that they 

monitored and communicated, both internally and externally, about the lawsuits and public 

scrutiny that arose from operational deficiencies. Accordingly, when speaking about GEO’s 

operations, lender relationships, and stable, predictable cash flows and dividends, Defendants 

knew of (or, at least were severely reckless as to) the realities alleged herein.

141. Second, as exemplified by Senator’s Warren letter, Defendants’ conduct involved 

scrutiny from the highest levels of the United States government. Defendants misrepresented and 

omitted the degree and effects that the increasing government scrutiny had on GEO’s ability to 

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generate cash flows, maintain financing relationships with key lenders, and continue paying stable, 

predictable dividends. Given the high-profile sources of the scrutiny, GEO’s leadership—

including its CEO, CFO, SVPs, and Presidents of subsidiaries—were aware of those facts (or 

severely reckless in purposefully ignoring those facts).

142. During the Class Period, for example, the heightening scrutiny on GEO’s 

operations involved:

• the 2018 public refusal by every major Democratic candidate for Florida governor 

to accept GEO’s money and Florida Democratic Party’s banning of all donations 

from private-prison firms;

• the March 12, 2019 questions by Congresswoman Ocasio-Cortez to WF’s CEO 

regarding the bank’s financing of private prison companies like GEO;

• the May 2019 bill by Congressman Crow to require immigration detention 

facilities, including all operated by GEO, to comply with site inspection requests 

from members of Congress within 48 hours;

• the May and June 2019 reports by the DHS OIG regarding unsafe and unhealthy 

conditions at multiple GEO facilities;

• the July 2019 letter from Senator Warren to the SEC Chairman;

• July 2019 letter from the House Oversight and Reform Committee demanding 

documents and communications pertaining to government contracts, amid reports 

of the deplorable treatment of migrants at the southern border;

• the October 2019 law AB-32 enacted in California barring the federal government 

from “enter[ing] into a contract with a private, for profit prison facility located in 

or outside the state”;

• the March 9, 2020, Senators’ Letter requesting information from GEO about its 

ability to respond to COVID-19;

143. If Defendant Zoley knew of these high-profile incidents, then he has the requisite 

knowledge to show scienter. If Defendant Zoley did not know, then he purposefully ignored 

material information occurring at the highest level of the United States government and affecting 

GEO’s business. Such ignorance by GEO’s top executive would be severely reckless and, 

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therefore, show scienter.

144. In any case, Defendant Zoley’s direct letter to ICE on May 30, 2018, shows his 

knowledge, specifically that “[w]e are deeply alarmed at the rapidly increasing costs in defending 

these lawsuits without reimbursement from ICE, or assistance in their defense by the Department

of Justice (DOJ).” Moreover, Defendants’ receipt of the 3/9/20 Senators’ Letter confirms that 

Defendants were aware of the material issues arising from GEO facilities’ preparations and 

abilities to protect their wards during the COVID-19 pandemic. Indeed, on March 12, 2020, GEO 

responded to the Senators’ Letter, confirming that they were “fully aware of the emerging health 

concerns presented by COVID-19” and emphasizing GEO’s purported “long-standing history of 

providing safe, secure, and humane conditions at all of its facilities.” Additionally, on July 13, 

2020, Zoley testified before Congress’ Border Security, Facilitation & Operations Subcomittee at 

a hearing titled “Oversight of ICE Detention Facilities: Examining ICE Contractors’ Response to 

COVID-19.” At the hearing, Chairwoman Kathleen Rice stated that “over the past few months, it 

is clear that ICE and its contractors have not taken this outbreak seriously and have not treated it 

aggressively enough” and that “[d]espite . . . horrific losses, ICE is continuing normal operations 

and contractors are following in lock step.” Defendant Zoley then testified about whether GEO 

was properly responding to the COVID-19 outbreak. Defendant Zoley’s preparation to testify and 

testimony before Congress indicate that he prepared himself and had direct knowledge of these 

topics. If he did not have direct knowledge, then he was severely reckless in testifying before 

Congress without such knowledge. Thus, Defendants had direct knowledge of (or, at a minimum, 

were severely reckless as to) the issues identified herein.

145. Third, Defendant Zoley repeatedly spoke to investors about the precise issues 

alleged herein. Throughout the Class Period, Defendant Zoley consistently touted GEO’s cash 

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flows and dividends as “stable,” “sustainable,” “predictable,” and “safe,” notwithstanding GEO’s 

true state of affairs vis-à-vis operational deficiencies, increasing scrutiny, loss of lenders, and 

threatened dividends. During the increasing scrutiny in 2019, Defendant Zoley told investors that 

“a false narrative and deliberate mischaracterization of our long-standing role as a quality service 

provider to ICE” were driving “the recent media stories regarding overcrowded border patrol 

facilities and financial institutions discontinuing future financial support for private operators of 

ICE Processing Centers.” As COVID-19 emerged and pressured GEO’s operations already 

plagued with systemic medical deficiencies, Defendant Zoley once again demonstrated awareness 

and knowledge, assuring investors that “GEO had implemented comprehensive steps to address 

and mitigate the risks of COVID-19 to all of those in our care and our employees.”

146. CFO Evans also repeatedly assured investors that GEO’s cash flows were “stable,” 

“sustainable” and “predictable,” attributed heightened scrutiny on GEO to “a mischaracterization 

of our role as a service provider and our overall Company record,” and conveyed that there was 

“misinformation regarding our banking partners and our access to capital.”

147. Those comments indicate that Defendant Zoley and GEO’s CFO had knowledge 

(or were severely reckless to the accuracy) of GEO’s operations, public scrutiny, ability to address 

COVID-19 and, in turn, the stability and predictability of cash flows and dividend amount.

148. Fourth, these were the precise issues that other company executives in the private 

prison sector were addressing. In a May 7, 2020, earnings conference call, for example, CEO

Damon Hininger of GEO’s peer company, CoreCivic, openly addressed the negative effects of 

decreased facility population due to COVID-19 and the loss of government contracts, noting that 

the government’s reduction in utilization of the company’s facilities “has a material effect on our 

near term earnings,” and that CoreCivic would not provide financial guidance for the second 

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quarter of 2020 “due to the uncertainties around the length of the COVID-19 pandemic, the timing 

and pace of the recovery, and policy choices by federal, state and local governments.” CoreCivic 

subsequently acknowledged the “unprecedented challenges posed by the COVID-19 pandemic,” 

the fact that “capital has become increasingly expensive,” and the prison giant’s need to look for 

approaches that would improve the company’s “credit profile and long-term cost of capital.” The 

statements of CoreCivic and its executives demonstrate that industry leaders had knowledge of the 

problems plaguing private prison operators, as well as the financial effect these problems would 

have on the companies and their dividends. This openly addressed knowledge supports an 

inference that Defendant Zoley had knowledge of the true state of GEO’s business (or, at a 

minimum, were severely reckless as to those facts) when he made the false and misleading 

statements and omissions to investors.

149. Fifth, shareholders actually raised the operational deficiencies to GEO’s Board and 

executives, including Defendant Zoley and, in turn, the Company had direct knowledge of the 

violations giving rise to public scrutiny, loss of lenders, loss of contracts, and instability with cash 

flows and dividends. In July 2018, CalSTRS representatives began visiting GEO’s facilities and 

conducting meetings with GEO’s senior management concerning their operational processes and 

risk management efforts. Based on that investigation, CalSTRS had voted by November 2018 to 

remove all of its holdings from GEO. Thereafter, in response to a May 2019 shareholder initiative, 

GEO issued a September 2019 report on the conditions in its facilities and operational issues. Thus, 

GEO’s management had direct knowledge of the issues alleged herein yet continued to 

misrepresent material facts to investors.

150. These collective allegations show that Defendant Zoley, as well GEO’s other 

executives, had direct knowledge of the true state of GEO’s business (or, at a minimum, were 

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severely reckless as to those facts). When providing materially false or misleading information to 

investors and/or making material omission, therefore, Defendants had the requisite scienter to be 

held liable to those investors who suffered losses.

VI. NO SAFE HARBOR

151. The statutory safe harbor provided for forward-looking statements under certain 

circumstances does not apply to any of the allegedly misleading statements pleaded in the 

Consolidated Complaint. Many of the specific statements pleaded herein were not identified as 

“forward-looking statements” when made. To the extent that there were any forward-looking 

statements, there were no meaningful cautionary statements identifying important factors that 

could cause actual results to differ materially from those in the purportedly forward-looking 

statements. Alternatively, to the extent that the statutory safe harbor does apply to any forwardlooking statements pleaded herein, Defendants are liable for those misleading forward-looking 

statements because at the time that each of those forward-looking statements were made, the 

particular speaker knew that the particular forward-looking statement was misleading, and/or the 

forward-looking statement was authorized and/or approved by an GEO executive officer who 

knew that those statements were misleading when made.

VII. LOSS CAUSATION

152. The false and misleading misrepresentations and material omissions, as alleged 

herein, directly and proximately caused the economic loss suffered by Plaintiffs and the Class 

members they represent.

153. During the Class Period, Plaintiffs and Class members purchased GEO common 

stock at artificially inflated prices and were damaged thereby. The price of the Company’s 

securities declined significantly when the misrepresentations made to the market, and/or the 

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information alleged herein to have been concealed from the market, and/or the effects thereof, 

were disseminated and publicly revealed.

154. During the Class Period, Defendants materially misled the investing public, 

thereby inflating the price of GEO common stock, by publicly issuing false and/or misleading 

statements and/or omitting to disclose material facts necessary to make Defendants’ statements, as 

set forth herein, not false and/or misleading. The statements and omissions were materially false 

and/or misleading because they failed to disclose material adverse information and/or 

misrepresented the truth about GEO’s business, operations, and financial performance, as alleged 

herein.

155. At all relevant times, the material misrepresentations and omissions particularized 

in this Complaint directly or proximately caused or were a substantial contributing cause of the 

damages sustained by Plaintiffs and other members of the Class. Defendants made or caused to be 

made materially false and/or misleading statements about GEO’s financial results, internal controls 

and related financial metrics and the reliability of their reported results. These material 

misstatements and/or omissions had the cause and effect of creating in the market a false positive 

assessment of the Company and its financial performance, internal controls and related well-being, 

thus causing the Company’s securities to be overvalued and the price of its common stock to be 

artificially inflated at all relevant times. Defendants’ materially false and/or misleading statements, 

as alleged herein, resulted in Plaintiffs and other members of the Class in purchasing the 

Company’s securities at artificially inflated prices, thus causing the damages complained of herein 

when the truth was revealed in a series of corrective disclosures – including those on March 5,

2019, March 10, 2019, March 12, 2019, July 11, 2019, July 17, 2019, March 9-10, 2020, June 17,

2020, July 16, 2020 and August 6, 2020 – causing the trading price of GEO common stock to 

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materially decline, and removing the previously embedded artificial inflation.

VIII. PLAINTIFFS’ CLASS ACTION ALLEGATIONS

156. Plaintiffs bring this action as a class action pursuant to Federal Rule of Civil 

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all persons or entities that purchased 

or otherwise acquired GEO common stock during the Class Period and were damaged thereby. 

Excluded from the Class are Defendants herein, the officers and directors of the Company, at all 

relevant times, members of their immediate families and their legal representatives, heirs, 

successors or assigns and any entity in which Defendants have or had a controlling interest.

157. The members of the Class are so numerous that joinder of all members is 

impracticable. Throughout the Class Period, GEO common stock was actively traded on the 

NYSE. While the exact number of Class members is unknown to Plaintiffs at this time and can be 

ascertained only through appropriate discovery, Plaintiffs believe that there are hundreds or 

thousands of members in the proposed Class. Record owners and other members of the Class may 

be identified from records maintained by GEO or its transfer agent and may be notified of the 

pendency of this action by mail, using the form of notice similar to that customarily used in 

securities class actions.

158. Plaintiffs’ claims are typical of the claims of the members of the Class as all 

members of the Class are similarly affected by Defendants’ wrongful conduct in violation of 

federal law that is complained of herein.

159. Plaintiffs will fairly and adequately protect the interests of the members of the 

Class and have retained counsel competent and experienced in class and securities litigation. 

Plaintiffs have no interests antagonistic to or in conflict with those of the Class.

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160. Common questions of law and fact exist as to all members of the Class and 

predominate over any questions solely affecting individual members of the Class. Among the 

questions of law and fact common to the Class are:

a. whether the federal securities laws were violated by Defendants’ acts as alleged 

herein;

b. whether statements made by Defendants to the investing public during the Class 

Period misrepresented material facts about the business, operations and 

management of GEO;

c. whether Defendant Zoley caused GEO to issue false and misleading financial 

statements during the Class Period;

d. whether Defendants acted knowingly or recklessly in issuing false and misleading 

financial statements;

e. whether the prices of GEO common stock during the Class Period were artificially 

inflated because of the Defendants’ conduct complained of herein; and

f. whether the members of the Class have sustained damages and, if so, what is the 

proper measure of damages.

161. A class action is superior to all other available methods for the fair and efficient 

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the 

damages suffered by individual Class members may be relatively small, the expense and burden 

of individual litigation make it impossible for members of the Class to individually redress the 

wrongs done to them. There will be no difficulty in the management of this action as a class action.

162. Plaintiffs will rely, in part, upon the presumption of reliance established by the 

fraud-on-the-market doctrine in that:

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a. Defendants made public misrepresentations or failed to disclose material facts during

the Class Period;

b. the omissions and misrepresentations were material;

c. GEO common stock is traded in an efficient market;

d. the Company’s shares were liquid and traded with moderate to heavy volume during 

the Class Period;

e. the Company traded on the NYSE and was covered by multiple analysts;

f. the misrepresentations and omissions alleged would tend to induce a reasonable 

investor to misjudge the value of the Company’s securities; and

g. Plaintiffs and members of the Class purchased, acquired and/or sold GEO common 

stock between the time the Defendants failed to disclose or misrepresented material 

facts and the time the true facts were disclosed, without knowledge of the omitted or 

misrepresented facts.

163. Based upon the foregoing, Plaintiffs and the members of the Class are entitled to 

a presumption of reliance upon the integrity of the market.

164. Alternatively, Plaintiffs and the members of the Class are entitled to the 

presumption of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of 

Utah v. U.S., 406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material information in 

their Class Period statements in violation of a duty to disclose such information, as detailed above.

COUNT I

Violations of § 10(b) of the Exchange Act and Rule 10b-5

Against All Defendants

165. Plaintiffs repeat and reallege each and every allegation contained in ¶¶1-164 as if 

fully set forth herein.

166. This Count is asserted against Defendants is based upon § 10(b) of the Exchange

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Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.

167. During the Class Period, Defendants, individually and in concert, directly or 

indirectly, disseminated or approved the false statements specified above, which they knew or 

deliberately disregarded were misleading in that they contained misrepresentations and failed to 

disclose material facts necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading.

168. Defendants violated §10(b) of the Exchange Act and Rule 10b-5 in that they:

a. employed devices, schemes and artifices to defraud;

b. made untrue statements of material facts or omitted to state material facts necessary in 

order to make the statements made, in light of the circumstances under which they 

were made, not misleading; or

c. engaged in acts, practices and a course of business that operated as a fraud or deceit 

upon Plaintiffs and others similarly situated in connection with their purchases of GEO 

common stock during the Class Period.

169. Defendants acted with scienter in that they knew that the public documents and 

statements issued or disseminated in the name of GEO were materially false and misleading; knew 

that such statements or documents would be issued or disseminated to the investing public; and 

knowingly and substantially participated, or acquiesced in the issuance or dissemination of such 

statements or documents as primary violations of the securities laws. These defendants by virtue 

of their receipt of information reflecting the true facts of GEO, their control over, and/or receipt 

and/or modification of GEO’s allegedly materially misleading statements, and/or their associations 

with the Company which made them privy to confidential proprietary information concerning 

GEO, participated in the fraudulent scheme alleged herein.

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170. Defendant Zoley, who is a senior officer and/or director of the Company, had 

actual knowledge of the material omissions and/or the falsity of the material statements set forth 

above, and intended to deceive Plaintiffs and the other members of the Class, or, in the alternative, 

acted with reckless disregard for the truth when they failed to ascertain and disclose the true facts 

in the statements made by them or other GEO personnel to members of the investing public, 

including Plaintiffs and the Class.

171. As a result of the foregoing, the market price of GEO common stock was 

artificially inflated during the Class Period. In ignorance of the falsity of Defendants’ statements, 

Plaintiffs and the other members of the Class relied on the statements described above and/or the 

integrity of the market price of GEO common stock during the Class Period in purchasing GEO 

common stock at prices that were artificially inflated as a result of Defendants’ false and 

misleading statements.

172. Had Plaintiffs and the other members of the Class been aware that the market price 

of GEO common stock had been artificially and falsely inflated by Defendants’ misleading 

statements and by the material adverse information which Defendants did not disclose, they would 

not have purchased GEO common stock at the artificially inflated prices that they did, or at all.

173. As a result of the wrongful conduct alleged herein, Plaintiffs and other members 

of the Class have suffered damages in an amount to be established at trial.

174. By reason of the foregoing, Defendants have violated § 10(b) of the Exchange Act 

and Rule 10b-5 promulgated thereunder and are liable to Plaintiffs and the other members of the 

Class for substantial damages which they suffered in connection with their purchase of GEO 

common stock during the Class Period.

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COUNT II

Violations of § 20(a) of the Exchange Act

Against Defendant Zoley

175. Plaintiffs repeat and reallege each and every allegation contained in ¶¶1-164 as if 

fully set forth herein.

176. During the Class Period, Defendant Zoley participated in the operation and 

management of GEO, and conducted and participated, directly and indirectly, in the conduct of 

GEO’s business affairs. Because of his senior position, he knew the adverse non-public 

information about GEO’s current financial position and future business prospects.

177. As an officer and/or director of a publicly owned company, Defendant Zoley had 

a duty to disseminate accurate and truthful information with respect to GEO’s business practices, 

and to correct promptly any public statements issued by GEO which had become materially false 

or misleading.

178. Because of his position of control and authority as a senior officer, Defendant

Zoley was able to, and did, control the contents of the various reports, press releases and public 

filings which GEO disseminated in the marketplace during the Class Period concerning the 

Company’s business, operational and accounting policies. Throughout the Class Period, Defendant

Zoley exercised his power and authority to cause GEO to engage in the wrongful acts complained 

of herein. Defendant Zoley therefore, was a “controlling person” of GEO within the meaning of § 

20(a) of the Exchange Act. In this capacity, he participated in the unlawful conduct alleged which 

artificially inflated the market price of GEO common stock.

179. Defendant Zoley, therefore, acted as a controlling person of GEO. By reason of 

his senior management position and/or being director of GEO, Defendant Zoley had the power to 

direct the actions of, and exercised the same to cause, GEO to engage in the unlawful acts and 

conduct complained of herein. Defendant Zoley exercised control over the general operations of 

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GEO and possessed the power to control the specific activities which comprise the primary 

violations about which Plaintiffs and the other members of the Class complain.

180. By reason of the above conduct, Defendant Zoley is liable pursuant to § 20(a) of 

the Exchange Act for the violations committed by GEO.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs’ demand judgment against Defendants as follows:

A. Determining that the instant action may be maintained as a class action under Rule 23 

of the Federal Rules of Civil Procedure, and certifying Plaintiffs as the Class 

representatives;

B. Requiring Defendants to pay damages sustained by Plaintiffs and the Class by reason 

of the acts and transactions alleged herein;

C. Awarding Plaintiffs and the other members of the Class prejudgment and postjudgment interest, as well as their reasonable attorneys’ fees, expert fees and other 

costs; and

D. Awarding such other and further relief as this Court may deem just and proper.

DEMAND FOR TRIAL BY JURY

Plaintiffs hereby demand a trial by jury.

Dated: October 4, 2021 Respectfully submitted,

ROCHE FREEDMAN LLP

/s/ Velvel (Devin) Freedman

Velvel (Devin) Freedman (FL# 99762) 

Ivy T. Ngo (pro hac vice)

Constantine P. Economides (FL# 118177) 

SunTrust International Center

1 S.E. 3rd Avenue, Suite 1240

Miami, FL 33131

Telephone: (305) 851-5997 

vel@rochefreedman.com

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 72 of 88
73

ingo@rochefreedman.com

ceconomides@rochefreedman.com

LEVI & KORSINSKY, LLP

Nicholas I. Porritt 

Adam M. Apton

1101 30th Street NW, Suite 115

Washington, DC 20007

Tel: (202) 524-4290

Fax: (202) 333-2121

nporritt@zlk.com

aapton@zlk.com

Co-Lead Counsel for the Class

CULLIN O’BRIEN LAW, P.A.

Cullin O’Brien (FL# 0597341) 

6541 NE 21st Way

Fort Lauderdale, Florida 33308 

Tel: (561) 676-6370

Fax: (561) 320-0285

E-mail: cullin@cullinobrienlaw.com

Additional Counsel for Lead Plaintiff James 

Michael DeLoach

THE SCHALL LAW FIRM

Brian Schall (pro hac vice forthcoming) 

1880 Century Park East, Suite 404

Los Angeles, CA 90067 

Telephone: (424) 303-1964 

Email: brian@schallfirm.com

Additional Counsel for Lead Plaintiff Edward 

Oketola

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 73 of 88
74

CERTIFICATE OF SERVICE

I hereby certify that on October 4, 2021, I authorized the electronic filing of the foregoing 

with the Clerk of the Court using the CM/ECF system which will send notification of such filing 

to the e-mail addresses denoted on the attached Electronic Mail Notice List.

/s/ Velvel (Devin) Freedman

Velvel (Devin) Freedman

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 74 of 88
APPENDIX “A”

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 75 of 88
1

When/Where Speaker False and/or Misleading Statement

4 11/8/2018; 

3Q18 10-Q

GEO On October 22, 2014, former civil immigration detainees at the Aurora Immigration Detention 

Center filed a class action lawsuit against the Company in the United States District Court for the 

District of Colorado (the “Court”). The complaint alleges that the Company was in violation of the 

Colorado Minimum Wages of Workers Act and the federal Trafficking Victims Protection Act 

(“TVPA”). The plaintiff class claims that the Company was unjustly enriched as a result of the level 

of payment the detainees received for work performed at the facility, even though the voluntary 

work program as well as the wage rates and standards associated with the program that are at issue 

in the case are authorized by the Federal government under guidelines approved by the United States 

Congress. On July 6, 2015, the Court found that detainees were not employees under the Colorado 

Minimum Wage Order and dismissed this claim. In February 2017, the Court granted the plaintiffclass’ motion for class certification which the Company appealed to the 10th Circuit Court of 

Appeals. On February 9, 2018, a three-judge panel of the appellate court affirmed the classcertification order. A petition for rehearing en banc was denied on March 7, 2018. On October 2, 

2018, the U.S. Supreme Court denied the Company’s petition for a writ of certiorari on the class 

certification order. The plaintiff class seeks actual damages, compensatory damages, exemplary 

damages, punitive damages, restitution, attorneys’ fees and costs, and such other relief as the Court 

may deem proper. In the time since the Colorado suit was initially filed, three similar lawsuits have 

been filed – two in Washington and one in California. In Washington, one of the two lawsuits was 

filed on September 9, 2017 by immigration detainees against the Company in the U.S. District Court 

for the Western District of Washington. The second was filed on September 20, 2017 by the State 

Attorney General against the Company in the Superior Court of the State of Washington for Pierce 

County, which the Company removed to the U.S. District Court for the Western District of 

Washington on October 9, 2017. In California, a class-action lawsuit was filed on December 19, 

2017 by immigration detainees against the Company in the U.S. District Court Eastern Division of 

the Central District of California. All three lawsuits allege violations of the respective state’s 

minimum wage laws. However, the California lawsuit, like the Colorado suit, also includes claims 

based that the Company violated the TVPA and California’s equivalent state statute. The Company 

intends to take all necessary steps to vigorously defend itself and has consistently refuted the 

allegations and claims in these lawsuits. The Company has not recorded an accrual relating to 

these matters at this time, as a loss is not considered probable nor reasonably estimable at this 

stage of the lawsuit.

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 76 of 88
2

The nature of the Company’s business exposes it to various types of third-party legal claims or 

litigation against the Company, including, but not limited to, civil rights claims relating to conditions 

of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, 

medical malpractice claims, product liability claims, intellectual property infringement claims, 

claims relating to employment matters (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third parties, 

contractual claims and claims for personal injury or other damages resulting from contact with the 

Company’s facilities, programs, electronic monitoring products, personnel or prisoners, including 

damages arising from a prisoner’s escape or from a disturbance or riot at a facility. The Company 

does not expect the outcome of any pending claims or legal proceedings to have a material adverse 

effect on its financial condition, results of operations or cash flows. However, the results of these 

claims or proceedings cannot be predicted with certainty, and an unfavorable resolution of one or 

more of these claims or proceedings could have a material adverse effect on the Company’s financial 

condition, results of operations or cash flows. 

6 2/14/2019; 

4Q18 

Earnings Call

GEO During the fourth quarter, we recognized -- reorganized our legal representation and strategy with 

respect to certain legal cases and incurred one-time legal transition expenses. We believe, we have 

adequately accounted for known legal cases in our guidance for 2019.

10 2/25/2019; 

FY18 10-K

GEO; 

Zoley

As previously reported and described in our prior periodic reports, including most recently in our 

Form 10-Q for the quarter ended June 30, 2018, on February 8, 2017, former civil immigration 

detainees at the Aurora Immigration Detention Center filed a class action lawsuit on October 22, 

2014, against the Company in the United States District Court for the District of Colorado (the 

“Court”). The complaint alleges that the Company was in violation of the Colorado Minimum 

Wages of Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The plaintiff 

class claims that the Company was unjustly enriched because of the level of payment the detainees 

received for work performed at the facility, even though the voluntary work program as well as the 

wage rates and standards associated with the program that are at issue in the case are authorized by 

the Federal government under guidelines approved by the United States Congress. On July 6, 2015, 

the Court found that detainees were not employees under the Colorado Minimum Wage Order and 

dismissed this claim. In February 2017, the Court granted the plaintiff-class’ motion for class 

certification. The plaintiff class seeks actual damages, compensatory damages, exemplary damages, 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 77 of 88
3

punitive damages, restitution, attorneys’ fees and costs, and such other relief as the Court may deem 

proper. In the time since the Colorado suit was initially filed, three similar lawsuits have been filed 

— two in Washington and one in California. In Washington, one of the two lawsuits was filed on 

September 9, 2017 by immigration detainees against the Company in the U.S. District Court for the 

Western District of Washington. The second was filed on September 20, 2017 by the State Attorney 

General against the Company in the Superior Court of the State of Washington for Pierce County, 

which the Company removed to the U.S. District Court for the Western District of Washington on 

October 9, 2017. In California, a class-action lawsuit was filed on December 19, 2017 by 

immigration detainees against the Company in the U.S. District Court Eastern Division of the 

Central District of California. All three lawsuits allege violations of the respective state’s minimum 

wage laws. However, the California lawsuit, like the Colorado suit, also includes claims based that 

the Company violated the TVPA and California’s equivalent state statute. The Company intends to 

take all necessary steps to vigorously defend itself and has consistently refuted the allegations and 

claims in these lawsuits. The Company has not recorded an accrual relating to these matters at 

this time, as a loss is not considered probable nor reasonably estimable at this stage of the lawsuit.

The nature of the Company’s business exposes it to various types of third-party legal claims or

litigation against the Company, including, but not limited to, civil rights claims relating to conditions 

of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, 

medical malpractice claims, product liability claims, intellectual property infringement claims, 

claims relating to employment matters (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third parties, 

contractual claims and claims for personal injury or other damages resulting from contact with the 

Company’s facilities, programs, electronic monitoring products, personnel or prisoners, including 

damages arising from a prisoner’s escape or from a disturbance or riot at a facility. The Company 

accrues for legal costs associated with loss contingencies when those costs are probable and 

reasonably estimable. The Company does not expect the outcome of any pending claims or legal 

proceedings to have a material adverse effect on its financial condition, results of operations or 

cash flows.

23 5/6/2019; 

1Q19 10-Q

GEO As previously reported and described in the Company’s prior periodic reports, including most 

recently in our Form 10-K for the year ended December 31, 2018, on February 8, 2017, former civil 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 78 of 88
4

immigration detainees at the Aurora Immigration Detention Center filed a class action lawsuit on 

October 22, 2014, against the Company in the United States District Court for the District of 

Colorado (the “Court”). The complaint alleges that the Company was in violation of the Colorado 

Minimum Wages of Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). 

The plaintiff class claims that the Company was unjustly enriched because of the level of payment 

the detainees received for work performed at the facility, even though the voluntary work program 

as well as the wage rates and standards associated with the program that are at issue in the case are 

authorized by the Federal government under guidelines approved by the United States Congress. 

On July 6, 2015, the Court found that detainees were not employees under the Colorado Minimum 

Wage Order and dismissed this claim. In February 2017, the Court granted the plaintiff-class’ 

motion for class certification. The plaintiff class seeks actual damages, compensatory damages, 

exemplary damages, punitive damages, restitution, attorneys’ fees and costs, and such other relief 

as the Court may deem proper. In the time since the Colorado suit was initially filed, three similar 

lawsuits have been filed - two in Washington and one in California. In Washington, one of the two 

lawsuits was filed on September 9, 2017 by immigration detainees against the Company in the U.S. 

District Court for the Western District of Washington. The second was filed on September 20, 2017 

by the State Attorney General against the Company in the Superior Court of the State of Washington 

for Pierce County, which the Company removed to the U.S. District Court for the Western District 

of Washington on October 9, 2017. In California, a class-action lawsuit was filed on December 19, 

2017 by immigration detainees against the Company in the U.S. District Court Eastern Division of 

the Central District of California. All three lawsuits allege violations of the respective state’s 

minimum wage laws. However, the California lawsuit, like the Colorado suit, also includes claims 

that the Company violated the TVPA and California’s equivalent state statute. The Company intends 

to take all necessary steps to vigorously defend itself and has consistently refuted the allegations 

and claims in these lawsuits. The Company has not recorded an accrual relating to these matters 

at this time, as a loss is not considered probable nor reasonably estimable at this stage of the 

lawsuit.

The nature of the Company’s business exposes it to various types of third-party legal claims or 

litigation against the Company, including, but not limited to, civil rights claims relating to conditions 

of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, 

medical malpractice claims, product liability claims, intellectual property infringement claims, 

claims relating to employment matters (including, but not limited to, employment discrimination 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 79 of 88
5

claims, union grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third parties, 

contractual claims and claims for personal injury or other damages resulting from contact with the 

Company’s facilities, programs, electronic monitoring products, personnel or prisoners, including 

damages arising from a prisoner’s escape or from a disturbance or riot at a facility. The Company 

does not expect the outcome of any pending claims or legal proceedings to have a material adverse 

effect on its financial condition, results of operations or cash flows. However, the results of these 

claims or proceedings cannot be predicted with certainty, and an unfavorable resolution of one or 

more of these claims or proceedings could have a material adverse effect on the Company’s financial 

condition, results of operations or cash flows.

31 8/2/2019; 

2Q19 10-Q

GEO As previously reported and described in the Company’s prior periodic reports, including most 

recently in our Form 10-Q for the quarter ended March 31, 2019, former civil immigration detainees 

at the Aurora Immigration Processing Center filed a class action lawsuit on October 22, 2014, 

against the Company in the United States District Court for the District of Colorado (the “Court”). 

The complaint alleges that the Company was in violation of the Colorado Minimum Wages of 

Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The plaintiff class 

claims that the Company was unjustly enriched because of the level of payment the detainees 

received for work performed at the facility, even though the voluntary work program as well as the 

wage rates and standards associated with the program that are at issue in the case are authorized by 

the Federal government under guidelines approved by the United States Congress. On July 6, 2015, 

the Court found that detainees were not employees under the Colorado Minimum Wage Order and 

dismissed this claim. In February 2017, the Court granted the plaintiff-class’ motion for class 

certification. The plaintiff class seeks actual damages, compensatory damages, exemplary damages, 

punitive damages, restitution, attorneys’ fees and costs, and such other relief as the Court may deem 

proper. In the time since the Colorado suit was initially filed, three similar lawsuits have been filed 

- two in Washington and one in California. In Washington, one of the two lawsuits was filed on 

September 9, 2017 by immigration detainees against the Company in the U.S. District Court for the 

Western District of Washington. The second was filed on September 20, 2017 by the State Attorney 

General against the Company in the Superior Court of the State of Washington for Pierce County, 

which the Company removed to the U.S. District Court for the Western District of Washington on 

October 9, 2017. In California, a class-action lawsuit was filed on December 19, 2017 by 

immigration detainees against the Company in the U.S. District Court Eastern Division of the 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 80 of 88
6

Central District of California. All three lawsuits allege violations of the respective state’s minimum 

wage laws. However, the California lawsuit, like the Colorado suit, also includes claims that the 

Company violated the TVPA and California's equivalent state statute. On July 2, 2019, the Company 

filed a Motion for Summary Judgment in the Washington Attorney General’s Tacoma lawsuit based 

on the Company’s position that its legal defenses prevent the case from proceeding to trial. The 

Company intends to take all necessary steps to vigorously defend itself and has consistently refuted 

the allegations and claims in these lawsuits. The Company has not recorded an accrual relating to 

these matters at this time, as a loss is not considered probable nor reasonably estimable at this 

stage of the lawsuits. We establish accruals for specific legal proceedings when it is considered 

probable that a loss has been incurred and the amount of the loss can be reasonably estimated. 

However, the results of these claims or proceedings cannot be predicted with certainty, and an 

unfavorable resolution of one or more of these claims or proceedings could have a material adverse 

effect on the Company’s financial condition, results of operations or cash flows. Our accruals for 

loss contingencies are reviewed quarterly and adjusted as additional information becomes available. 

We do not accrue for anticipated legal fees and costs, but expense those items as incurred.

The nature of the Company’s business exposes it to various types of third-party legal claims or 

litigation against the Company, including, but not limited to, civil rights claims relating to conditions 

of confinement and/or mistreatment, sexual misconduct claims, medical malpractice claims, claims 

relating to the TVPA, product liability claims, intellectual property infringement claims, claims 

relating to employment laws (including, but not limited to, employment discrimination claims, 

union grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third parties, 

contractual claims and claims for personal injury or other damages resulting from contact with the 

Company's facilities, programs, electronic monitoring products, personnel, inmates or detainees, 

including damages arising from an escape or from a disturbance or riot at a facility. Expenses 

associated with legal proceedings may fluctuate from quarter to quarter based on the level of activity 

required during the different stages of legal proceedings, new developments that arise in the course 

of the legal proceedings, and the Company’s litigation strategy. The Company does not expect the 

outcome of any pending claims or legal proceedings to have a material adverse effect on its 

financial condition, results of operations or cash flows. However, the results of these claims or 

proceedings cannot be predicted with certainty, and an unfavorable resolution of one or more of 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 81 of 88
7

these claims or proceedings could have a material adverse effect on the Company’s financial 

condition, results of operations or cash flows.

42 11/7/19; 3Q19 

10-Q

GEO As previously reported and described in the Company's prior periodic reports, including most 

recently in our Form 10-Q for the quarter ended June 30, 2019, former civil immigration detainees 

at the Aurora Immigration Processing Center filed a class action lawsuit on October 22, 2014, 

against the Company in the United States District Court for the District of Colorado (the “Court”). 

The complaint alleges that the Company was in violation of the Colorado Minimum Wages of 

Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The plaintiff class 

claims that the Company was unjustly enriched because of the level of payment the detainees 

received for work performed at the facility, even though the voluntary work program as well as the 

wage rates and standards associated with the program that are at issue in the case are authorized by 

the Federal government under guidelines approved by the United States Congress. On July 6, 2015, 

the Court found that detainees were not employees under the Colorado Minimum Wage Order and 

dismissed this claim. In February 2017, the Court granted the plaintiff-class’ motion for class 

certification on the TVPA and unjust enrichment claims. The plaintiff class seeks actual damages, 

compensatory damages, exemplary damages, punitive damages, restitution, attorneys’ fees and 

costs, and such other relief as the Court may deem proper. In the time since the Colorado suit was 

initially filed, three similar lawsuits have been filed - two in Washington and one in California. In 

Washington, one of the two lawsuits was filed on September 9, 2017 by immigration detainees 

against the Company in the U.S. District Court for the Western District of Washington. The second 

lawsuit was filed on September 20, 2017 by the State Attorney General against the Company in the 

Superior Court of the State of Washington for Pierce County, which the Company removed to the 

U.S. District Court for the Western District of Washington on October 9, 2017. In California, a 

class-action lawsuit was filed on December 19, 2017 by immigration detainees against the Company 

in the U.S. District Court Eastern Division of the Central District of California. All three lawsuits 

allege violations of the respective state’s minimum wage laws. However, the California lawsuit, like 

the Colorado suit, also includes claims that the Company violated the TVPA and California’s 

equivalent state statute. On September 27, 2019, the California plaintiff class filed a motion for class 

certification of both California-based and nationwide classes. The Company filed a response to this 

motion disputing the plaintiff class’ right to broad class treatment of the claims at issue. On July 2, 

2019, the Company filed a Motion for Summary Judgment in the Washington Attorney General’s 

Tacoma lawsuit based on the Company’s position that its legal defenses prevent the case from 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 82 of 88
8

proceeding to trial. The federal court in Washington denied the Company’s Motion for Summary 

Judgment on August 6, 2019. However, on August 20, 2019, the Department of Justice filed a 

Statement of Interest, which asked the Washington court to revisit its prior denial of the Company's 

intergovernmental immunity defense in the case. While the Washington court ultimately elected not 

to dismiss the case at the time, its order importantly declared that the Company’s intergovernmental 

immunity defense was legally viable, to be ultimately determined at trial. The two Washington cases 

are currently set for trial in March 2020. The Company intends to take all necessary steps to 

vigorously defend itself and has consistently refuted the allegations and claims in these lawsuits. 

The Company has not recorded an accrual relating to these matters at this time, as a loss is not 

considered probable nor reasonably estimable at this stage of the lawsuits. The Company 

establishes accruals for specific legal proceedings when it is considered probable that a loss has 

been incurred and the amount of the loss can be reasonably estimated. However, the results of these 

claims or proceedings cannot be predicted with certainty, and an unfavorable resolution of one or 

more of these claims or proceedings could have a material adverse effect on the Company’s financial 

condition, results of operations or cash flows. Our accruals for loss contingencies are reviewed 

quarterly and adjusted as additional information becomes available. We do not accrue for anticipated 

legal fees and costs, but expense those items as incurred.

The nature of the Company’s business exposes it to various types of third-party legal claims or 

litigation against the Company, including, but not limited to, civil rights claims relating to conditions 

of confinement and/or mistreatment, sexual misconduct claims, medical malpractice claims, claims 

relating to the TVPA, product liability claims, intellectual property infringement claims, claims 

relating to employment laws (including, but not limited to, employment discrimination claims, 

union grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third parties, 

contractual claims and claims for personal injury or other damages resulting from contact with the 

Company’s facilities, programs, electronic monitoring products, personnel, inmates or detainees, 

including damages arising from an escape or from a disturbance or riot at a facility. Expenses 

associated with legal proceedings may fluctuate from quarter to quarter based on the level of activity 

required during the different stages of legal proceedings, new developments that arise in the course 

of the legal proceedings, and the Company’s litigation strategy. The Company does not expect the 

outcome of any pending claims or legal proceedings to have a material adverse effect on its 

financial condition, results of operations or cash flows. However, the results of these claims or 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 83 of 88
9

proceedings cannot be predicted with certainty, and an unfavorable resolution of one or more of 

these claims or proceedings could have a material adverse effect on the Company's financial 

condition, results of operations or cash flows.

49 2/26/2020; 

FY19 10-K

GEO;

Zoley

As previously reported and described in the Company’s prior periodic reports, including most 

recently in its Form 10-Q for the quarter ended September 30, 2019, former civil immigration 

detainees at the Aurora Immigration Processing Center filed a class action lawsuit on October 22, 

2014, against the Company in the United States District Court for the District of Colorado (the 

“Court”). The complaint alleges that the Company was in violation of the Colorado Minimum 

Wages of Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The plaintiff 

class claims that the Company was unjustly enriched because of the level of payment the detainees 

received for work performed at the facility, even though the voluntary work program as well as the 

wage rates and standards associated with the program that are at issue in the case are authorized by 

the Federal government under guidelines approved by the United States Congress. On July 6, 2015, 

the Court found that detainees were not employees under the Colorado Minimum Wage Order and 

dismissed this claim. In February 2017, the Court granted the plaintiff-class’ motion for class 

certification on the TVPA and unjust enrichment claims. The plaintiff class seeks actual damages, 

compensatory damages, exemplary damages, punitive damages, restitution, attorneys’ fees and 

costs, and such other relief as the Court may deem proper. In the time since the Colorado suit was 

initially filed, three similar lawsuits have been filed - two in Washington and one in California. In 

Washington, one of the two lawsuits was filed on September 9, 2017 by immigration detainees 

against the Company in the U.S. District Court for the Western District of Washington. The second 

lawsuit was filed on September 20, 2017 by the State Attorney General against the Company in the 

Superior Court of the State of Washington for Pierce County, which the Company removed to the 

U.S. District Court for the Western District of Washington on October 9, 2017. In California, a 

class-action lawsuit was filed on December 19, 2017 by immigration detainees against the Company 

in the U.S. District Court Eastern Division of the Central District of California. All three lawsuits

allege violations of the respective state’s minimum wage laws. However, the California lawsuit, like 

the Colorado suit, also includes claims that the Company violated the TVPA and California’s 

equivalent state statute. On September 27, 2019, the California plaintiff class filed a motion for class 

certification of both California-based and nationwide classes. The Company filed a response to this 

motion disputing the plaintiff class’ right to broad class treatment of the claims at issue. On July 2, 

2019, the Company filed a Motion for Summary Judgment in the Washington Attorney General’s 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 84 of 88
10

Tacoma lawsuit based on the Company’s position that its legal defenses prevent the case from 

proceeding to trial. The federal court in Washington denied the Company’s Motion for Summary 

Judgment on August 6, 2019. However, on August 20, 2019, the Department of Justice filed a 

Statement of Interest, which asked the Washington court to revisit its prior denial of the Company's 

intergovernmental immunity defense in the case. While the Washington court ultimately elected not 

to dismiss the case at the time, its order importantly declared that the Company's intergovernmental 

immunity defense was legally viable, to be ultimately determined at trial. The two Washington cases 

are currently set for trial in April 2020. The Company intends to take all necessary steps to 

vigorously defend itself and has consistently refuted the allegations and claims in these lawsuits. 

The Company has not recorded an accrual relating to these matters at this time, as a loss is not 

considered probable nor reasonably estimable at this stage of the lawsuits. The Company 

establishes accruals for specific legal proceedings when it is considered probable that a loss has 

been incurred and the amount of the loss can be reasonably estimated. However, the results of these 

claims or proceedings cannot be predicted with certainty, and an unfavorable resolution of one or 

more of these claims or proceedings could have a material adverse effect on the Company’s financial 

condition, results of operations or cash flows. The Company’s accruals for loss contingencies are 

reviewed quarterly and adjusted as additional information becomes available. The Company does 

not accrue for anticipated legal fees and costs but expenses those items as incurred. 

On December 30, 2019, GEO filed a lawsuit for declaratory and injunctive relief challenging 

California’s newly enacted law - Assembly Bill 32 (AB-32) - which bars the federal government 

from engaging GEO or any other government contractors to provide detention services for illegal 

aliens. GEO’s claims, as described in the lawsuit, are grounded in authoritative legal doctrine that 

under the Constitution’s Supremacy Clause, the federal government is free from regulation by any 

state. By prohibiting federal detention facilities in California, the lawsuit argues AB-32 substantially 

interferes with the ability of USMS and ICE to carry out detention responsibilities for the federal 

government. Secondly, because AB-32 creates exceptions to the State when using GEO or any 

government contractors (to alleviate overcrowding), California’s statute unlawfully discriminates 

against the federal government. On December 31, 2019, GEO filed its motion for a preliminary 

injunction restraining California’s Governor and Attorney General from enforcing AB-32 against 

GEO’s detention facilities on behalf of USMS and ICE.

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 85 of 88
11

The nature of the Company’s business exposes it to various types of third-party legal claims or 

litigation against the Company, including, but not limited to, civil rights claims relating to conditions 

of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, 

medical malpractice claims, product liability claims, intellectual property infringement claims, 

claims relating to employment matters (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third parties, 

contractual claims and claims for personal injury or other damages resulting from contact with the 

Company’s facilities, programs, electronic monitoring products, personnel or prisoners, including 

damages arising from a prisoner’s escape or from a disturbance or riot at a facility. The Company 

accrues for legal costs associated with loss contingencies when those costs are probable and 

reasonably estimable. The Company does not expect the outcome of any pending claims or legal 

proceedings to have a material adverse effect on its financial condition, results of operations or 

cash flows.

60 5/6/2020; 

1Q20 10-Q

GEO As previously reported and described in the Company's prior periodic reports, including most 

recently in its Form 10-K for the year ended December 31, 2019, former civil immigration detainees 

at the Aurora Immigration Processing Center filed a class action lawsuit on October 22, 2014, 

against the Company in the United States District Court for the District of Colorado (the “Court”). 

The complaint alleges that the Company was in violation of the Colorado Minimum Wages of 

Workers Act and the federal Trafficking Victims Protection Act (“TVPA”). The plaintiff class 

claims that the Company was unjustly enriched because of the level of payment the detainees 

received for work performed at the facility, even though the voluntary work program as well as the 

wage rates and standards associated with the program that are at issue in the case are authorized by 

the Federal government under guidelines approved by the United States Congress. On July 6, 2015, 

the Court found that detainees were not employees under the Colorado Minimum Wage Order and 

dismissed this claim. In February 2017, the Court granted the plaintiff-class’ motion for class 

certification on the TVPA and unjust enrichment claims. The plaintiff class seeks actual damages, 

compensatory damages, exemplary damages, punitive damages, restitution, attorneys’ fees and 

costs, and such other relief as the Court may deem proper. In the time since the Colorado suit was 

initially filed, three similar lawsuits have been filed - two in Washington and one in California. In 

Washington, one of the two lawsuits was filed on September 9, 2017 by immigration detainees 

against the Company in the U.S. District Court for the Western District of Washington. The second 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 86 of 88
12

lawsuit was filed on September 20, 2017 by the State Attorney General against the Company in the 

Superior Court of the State of Washington for Pierce County, which the Company removed to the 

U.S. District Court for the Western District of Washington on October 9, 2017. In California, a 

class-action lawsuit was filed on December 19, 2017 by immigration detainees against the Company 

in the U.S. District Court Eastern Division of the Central District of California. All three lawsuits 

allege violations of the respective state’s minimum wage laws. However, the California lawsuit, like 

the Colorado suit, also includes claims that the Company violated the TVPA and California's 

equivalent state statute. On September 27, 2019, the California plaintiff class filed a motion for class 

certification of both California-based and nationwide classes. The Company filed a response to this 

motion disputing the plaintiff class’ right to broad class treatment of the claims at issue. On July 2, 

2019, the Company filed a Motion for Summary Judgment in the Washington Attorney General’s 

Tacoma lawsuit based on the Company’s position that its legal defenses prevent the case from 

proceeding to trial. The federal court in Washington denied the Company’s Motion for Summary 

Judgment on August 6, 2019. However, on August 20, 2019, the Department of Justice filed a 

Statement of Interest, which asked the Washington court to revisit its prior denial of the Company’s 

intergovernmental immunity defense in the case. While the Washington court ultimately elected not 

to dismiss the case at the time, its order importantly declared that the Company’s intergovernmental 

immunity defense was legally viable, to be ultimately determined at trial. Trial for the two 

Washington cases has been continued until sometime past June 2020. The Company intends to take 

all necessary steps to vigorously defend itself and has consistently refuted the allegations and claims 

in these lawsuits. The Company has not recorded an accrual relating to these matters at this time, 

as a loss is not considered probable nor reasonably estimable at this stage of the lawsuits. The 

Company establishes accruals for specific legal proceedings when it is considered probable that a 

loss has been incurred and the amount of the loss can be reasonably estimated. However, the results 

of these claims or proceedings cannot be predicted with certainty, and an unfavorable resolution of 

one or more of these claims or proceedings could have a material adverse effect on the Company’s 

financial condition, results of operations or cash flows. The Company’s accruals for loss 

contingencies are reviewed quarterly and adjusted as additional information becomes available. The 

Company does not accrue for anticipated legal fees and costs but expenses those items as incurred.

On December 30, 2019, GEO filed a lawsuit for declaratory and injunctive relief challenging 

California’s newly enacted law - Assembly Bill 32 (AB-32) - which bars the federal government 

from engaging GEO or any other government contractors to provide detention services for illegal 

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 87 of 88
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aliens. GEO’s claims, as described in the lawsuit, are grounded in authoritative legal doctrine that 

under the Constitution’s Supremacy Clause, the federal government is free from regulation by any 

state. By prohibiting federal detention facilities in California, the lawsuit argues AB-32 substantially 

interferes with the ability of U.S. Marshals Service (“USMS”) and ICE to carry out detention 

responsibilities for the federal government. Secondly, because AB-32 creates exceptions to the State 

when using GEO or any government contractors (to alleviate overcrowding), California’s statute 

unlawfully discriminates against the federal government. On December 31, 2019, GEO filed its 

motion for a preliminary injunction restraining California’s Governor and Attorney General from 

enforcing AB-32 against GEO’s detention facilities on behalf of USMS and ICE. The court granted 

the parties’ joint motion to reschedule the hearing to July 16, 2020.

The nature of the Company’s business exposes it to various types of third-party legal claims or 

litigation against the Company, including, but not limited to, civil rights claims relating to conditions 

of confinement and/or mistreatment, sexual misconduct claims brought by prisoners or detainees, 

medical malpractice claims, product liability claims, intellectual property infringement claims, 

claims relating to employment matters (including, but not limited to, employment discrimination 

claims, union grievances and wage and hour claims), property loss claims, environmental claims, 

automobile liability claims, indemnification claims by its customers and other third parties, 

contractual claims and claims for personal injury or other damages resulting from contact with the 

Company’s facilities, programs, electronic monitoring products, personnel or prisoners, including 

damages arising from a prisoner’s escape or from a disturbance or riot at a facility. The Company 

accrues for legal costs associated with loss contingencies when those costs are probable and 

reasonably estimable. The Company does not expect the outcome of any pending claims or legal 

proceedings to have a material adverse effect on its financial condition, results of operations or 

cash flows.

Case 9:20-cv-81063-RS Document 46 Entered on FLSD Docket 10/04/2021 Page 88 of 88