EGL pays $750K to settle Justice Department case

Houston-based EGL allegedly provided various meals, sporting event tickets and other gifts to KBR between March 2003 and March 2005, according to the department. The gratuities were paid while the company was working under a subcontract with KBR, formerly a division of Halliburton Co., which was once headed by Vice President Dick Cheney.

Both EGL and KBR performed work under the Army's Logistics Civil Augmentation Program, or Logcap, which provides a range of services including food and shelter for U.S. troops in Iraq and Kuwait. Lawmakers repeatedly have criticized the program and alleged that KBR has abused the terms of its contract and defrauded the government.

KBR spokeswoman Heather Browne said the company "has fully cooperated with the government on this issue" and "in no way condones or tolerates illegal or unethical behavior." A representative from EGL could not be reached for comment Tuesday afternoon.

The charges against privately held EGL, operating as Eagle Global Logistics, were initially made by former employees, David Vavra and Jerry Hyatt. Under a whistleblower provision of the False Claims Act, Vavra and Hyatt will each receive $157,000 of the settlement fees, the Justice Department said.

EGL has been accused of overcharging the military before. In August 2006, the company paid the U.S. government $4 million to settle a potential civil claims suit that alleged EGL inflated invoices for military cargo shipments to Iraq under the same KBR subcontract. The same two whistleblowers each received $800,000 as part of that settlement.

EGL also paid $300,000 in June 2007 to settle charges that the firm's agent in Kuwait overcharged the military for rent on shipping containers to Iraq. Vavra and Hyatt received $36,000 in that settlement.

The Defense Criminal Investigative Service and FBI participated in the ongoing investigation, the Justice Department said.