The government has filed a lawsuit against former Halliburton subsidiary Kellogg, Brown & Root Services Inc. (KBR), claiming the company knowingly submitted false claims in connection with a defense contract to provide logistics services for the U.S. Army. Kuwaiti companies La Nouvelle General Trading & Contracting Co. and First Kuwaiti Trading Co. were also named in the lawsuit, which was filed earlier this month in U.S. District Court for the Central District of Illinois. The government is suing all three under the False Claims Act and the Anti-Kickback Act.
Based in Houston, KBR is an engineering, construction and private military contracting company. KBR was under contract to provide the Army with logistical services in Iraq. La Nouvelle and First Kuwaiti were subcontractors working under KBR, providing transportation, maintenance and other services in connection with KBR’s government contract with the Army.
The government claims that KBR employees accepted kickbacks from La Nouvelle and First Kuwaiti between 2003 and 2004, in connection with securing and maintaining subcontracts. When seeking reimbursement from the government for services provided under the subcontracts, KBR allegedly inflated costs, or billed for goods and services that were either substandard or never provided.
In an example provided by Corporate Crime Reporter, KBR allegedly awarded La Nouvelle a subcontract to provide fuel tankers for over three times the tankers’ value. La Nouvelle then gave the KBR employee that awarded the subcontract a $1 million bank draft, according to the lawsuit.
In another instance, KBR used refrigerated trailers to transport ice for troops to consume. The trailers, according to the lawsuit, had previously been used as temporary morgues and had not been sanitized prior to transporting the ice.
Some of the allegations made in the lawsuit were first brought to the attention of the government by whistleblower Bud Conyers. The case is captioned United States ex rel. Conyers v. Kellogg Brown & Root Inc. et al., No. 4:12-cv-04095-SLD-JAG (C.D. Ill.).