Houston-based forwarder EGL Eagle Global Logistics has paid the government $4 million in refunds and penalties to settle an overcharge case stemming from 2003-04 military shipments into the Iraq war zone, the Justice Department said.
EGL was providing military air cargo service into Baghdad from Dubai under contract to Halliburton subsidiary Kellogg Brown & Root.
A former EGL manager in the Middle East, Christopher Cahill, has already pleaded guilty to overcharging by about $1.14 million from November 2003 through July 2004, Justice said, by applying a war risk surcharge that had not been billed by the air carrier EGL was using.
Cahill, who awaits sentencing after his February plea, has also said that when a government review questioned the extra fees he directed a subordinate to generate false billings from the air carrier to support the surcharges.
EGL has cooperated in the probe, and disclosed in various filings with the Securities and Exchange Commission that it had negotiated with federal authorities to pay the $4 million to cover $1.1 million in overcharges identified by auditors and $2.9 million in penalties.
But once Cahill pleaded guilty without the company having yet settled the payments, U.S. military offices for a time dropped EGL from consideration for any new contracts, and even canceled one EGL freight award that it was finalizing at the time. The False Claims were brought to the attention of the Department of Justice Relators, Jerry Hyatt and David Vavra. Hyatt and Vavra were represented by Beaumont attorney Greg Dykeman.
