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Halliburton subcontractor settles Iraq fraud allegations for $4 million

[JURIST] Eagle Global Logistics (EGL), a Houston based company hired by Halliburton subsidiary Kellogg, Brown & Root (KBR) [corporate websites] to ship military cargo to Iraq, has paid the government $4 million [press release] to settle potential claims under the False Claims Act [text] that it inflated invoices for Iraq military cargo shipments, the US Justice Department said Wednesday. EGL was accused of charging a "war risk surcharge" on military shipments from Dubai, United Arab Emirates to Iraq between November 2003 and July 2004. The allegations arose when David Vavra and Jerry Hyatt sued EGL on behalf of the US under the whistleblower provisions of the False Claims Act. Both parties will receive $800,000 from the settlement agreement as a result of their lawsuit.

Christopher Joseph Cahill, former EGL regional vice president for the Middle East and India, pleaded guilty in the US District Court for the Central District of Illinois to inflating the invoices by over $1 million in a bid to cover the surcharges earlier this year. Cahill admitted to ordering a subordinate to change invoices to cover up for the fraudulent surcharges after he became aware of the government investigation. AP has more.

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