Kellogg Brown & Root military contractor ordered to pay $108,342 for taking gifts from subs

A military contractor has been levied with a monetary judgment for accepting gifts and gratuities from sub-contractors. On Oct. 15, 2015, Kellogg Brown & Root, Inc. (KBR) was ordered to pay a final judgment of $108,342.10 to the United States by U.S. District Judge Marcia Crone.

KBR, a Delaware corporation with its principal place of business in Houston, violated provisions of the Anti-Kickback Act, 41 U.S.C. _8706, when KBR employees improperly accepted gifts and gratuities, including expensive dinners, golf outings and event tickets from various sub-contractors while KBR was providing logistic services to the United States Army Operations Support Command contract known as LOGCAP III. LOGCAP III was awarded to KBR for the provision of logistical support to the Army in Iraq and Afghanistan. The final judgment was ordered following a four-day bench trial in June 2015.

The kickbacks first came to light during an investigation of fraudulent billings in another case. At that time it was revealed that from 2003 to 2005, several managers in the KBR traffic department had accepted illegal benefits from two subcontractors, Eagle Global Logistics EGL and Panalpina, Inc. Both subcontractors previously settled claims for kickback violations without admitting liability.

The case was investigated by the Federal Bureau of Investigation and Defense Criminal Investigative Services. The case was prosecuted by Samuel Buffone, Kelley Hauser and Glenn Harris from the Department of Justice, Civil Division, and Michael Lockhart, Assistant U.S. Attorney for the Eastern District of Texas.

Jeffrey Newman represents whistleblowers but was not involved in this case.