Department of Justice Seal Department of Justice
FOR IMMEDIATE RELEASE
TUESDAY, JUNE 19, 2007
WWW.USDOJ.GOV
CIV
(202) 514-2007
TDD (202) 514-1888

Houston Firm Pays U.S. to Resolve Allegations
of Overcharging for Container Shipments to Iraq

WASHINGTON – EGL, Inc., operating as Eagle Global Logistics, has paid the United States $300,000 to settle allegations that the company’s local agent in Kuwait overcharged the military for rental charges on shipping containers to Iraq for the period from January through June of 2006, the Justice Department announced today. The Houston-based company’s containers were for shipments of military cargo to Iraq under an EGL subcontract with KBR, the prime contractor for the U.S. Army’s LOGCAP III contract for logistical support of military operations overseas.

This matter relates to allegations in a suit filed against EGL under the qui tam or whistleblower provisions of the False Claims Act. Under that act, private persons may bring a suit on behalf of the United States alleging the submission of false claims to the government and may receive a portion of the proceeds of the suit. The whistleblowers, David Vavra and Jerry Hyatt, will receive $36,000 as their part of the settlement.

“The Department of Justice remains committed to vigorously pursuing all those who overcharge the military,” said Peter D. Keisler, Assistant Attorney General for the Department’s Civil Division.

In August 2006, EGL paid the United States $4 million to settle potential civil claims under the False Claims Act based on the company’s alleged inflation of invoices for military cargo shipments to Iraq under the same subcontract with KBR.

The case is being prosecuted as part of a National Procurement Fraud initiative. In October 2006, Deputy Attorney General Paul J. McNulty announced the formation of a National Procurement Fraud Task Force designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force is chaired by Assistant Attorney General Alice S. Fisher for the Criminal Division and includes United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as others brought by members of the task force, demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

The Defense Criminal Investigative Service and Federal Bureau of Investigation participated in the investigation.

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