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Former Kbr Supervisor Pleads Guilty To Violating Anti-Kickback Act Accepted ‘Perks’ for Favorable Treatment related to Military Transportation Subcontracts

August 28, 2008

ROCK ISLAND, Ill. - A former supervisor for Kellogg, Brown and Root, Inc.’s transportation department, Robert Peter Bennett, 65, of Katy, Texas, pled guilty today to accepting ‘perks’ valued at $6,000 from employees of EGL, Inc. of Houston, Texas, for favorable treatment related to military subcontracts in violation of the Anti-Kickback Act. Sentencing is scheduled on December 5, 2008, in Rock Island, Illinois.

During his court appearance today and in court documents, Bennett admitted that from March 1, 2003 through April 29, 2005, while based in Houston, he accepted gratuities, including meals, drinks, golf outings and other gifts and entertainment, from EGL supervisor Kevin Andre Smoot and others on at least 40 different occasions. At the time, Bennett was KBR’s Corporate Traffic Supervisor for the LOGCAP III prime contract and was responsible, along with other KBR employees, for the day to day supervision of EGL’s performance on its freight-forwarding subcontract with KBR to transport military goods to Iraq, Afghanistan and Kuwait. Bennett admitted he knew that when Smoot and those acting at Smoot’s direction provided gratuities, they did so with the intent to obtain favorable treatment in connection with the subcontract awarded by KBR to EGL under the LOGCAP III prime contract.

LOGCAP (Logistics Civil Augmentation Program) is a U.S. Army program that uses civilian contractors to support the logistical needs of the U.S. military forces. In December 2001, the U.S. Army Operations Support Command, with headquarters at the Rock Island Arsenal in Rock Island, Illinois, awarded the LOGCAP III prime contract to KBR. The Army Field Support Command, also at the Rock Island Arsenal, administered the contract.

Smoot pled guilty in July 2007 to lying to federal investigators and violating the Anti-Kickback Act by giving “perks” to KBR employees. Smoot, 44, of Texas, was managing director of EGL’s Freight Forwarding Stations at its Houston office and was responsible for ensuring EGL fulfilled its obligation under the LOGCAP III prime contract.

Bennett waived indictment and pled guilty to a one-count information before U.S. District Judge Joe Billy McDade in Peoria, Illinois. The offense carries a maximum statutory penalty of 10 years in prison and a fine of up to $250,000. The defendant may also be ordered to pay restitution.

The case is being prosecuted by Assistant U.S. Attorney Matthew J. Cannon, U.S. Attorney’s Office for the Central District of Illinois, Rock Island Division; Trial Attorney Eric Schleef, Chicago Field Office of the U.S. Department of Justice’s Antitrust Division; and attorneys with the Department of Justice’s Criminal Division, Fraud Section. The charge is the result of investigation by Special Agents of the Federal Bureau of Investigation, Springfield Division; the Defense Criminal Investigative Service, Houston, Texas; the U.S. Army Criminal Investigation Division, North Central Fraud Field Office; and the Internal Revenue Service - Criminal Investigation Division.

The prosecution represents the Department of Justice’s commitment to protect U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative announced in October 2006 is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs.

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