U.S. Government Intervenes in False Claims Lawsuit Against Kellogg Brown & Root Services Inc.

WASHINGTON – The government has intervened in a lawsuit against Kellogg Brown & Root Services Inc. (KBR) in the U.S. District Court for the Central District of Illinois, announced the Department of Justice. The lawsuit was filed in February 2007 by James A. Brady III, a former employee of KBR, and alleges that KBR violated the False Claims Act in connection with "LOGCAP III," the third generation of the U.S. Army’s Logistics Civil Augmentation Program awarded and administered at Rock Island, Ill. Under the contract, KBR was to provide logistics and sustainment support to U.S. military troops in Iraq, Kuwait and Afghanistan. KBR performed LOGCAP III largely through subcontractors.

According to the complaint, KBR entered into a subcontract with the Turkish company Yuksel-Reysas to do operations and maintenance work at Army camps near Mosul, Iraq. Brady alleges that KBR violated the False Claims Act because it was unable to account for materials paid for under the Yuksel-Reysas subcontract.

"Contractors hired to provide support to our men and women in uniform must play by the rules," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.  "As we’ve done today, the Justice Department will take action against those whom we believe charge the taxpayers for goods and services that were not provided to American troops."

"We’ve decided to pursue the allegation that money that was intended to support the troops was instead used to pay claims that were false," said Jim Lewis, U.S. Attorney for the Central District of Illinois. 

The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that defendants submitted false claims for government funds. The private plaintiffs are called "relators," and, under the statute, are entitled to receive a share of any funds recovered through the lawsuit. The False Claims Act permits the government to recover three times its damages plus civil penalties. The government has asked the court for 60 days to file its own complaint stating the United States’ allegations.