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KBR

Conspiracy to Defraud the Government While Overseeing Fuel Deliveries in Afghanistan

Date: 12/12/2007 (Date of Indictment)

Misconduct Type: Government Contract Fraud

Enforcement Agency: Defense – Army

Contracting Party: Defense - Army

Court Type: Criminal

Amount: $891,000

Disposition: Pleaded Guilty

Synopsis: A federal grand jury in Virginia indicted James N. Sellman and Wallace A. Ward, former Kellogg Brown and Root, Inc. (KBR) Fuel Section employees, charging them with conspiracy, making a false writing, bribery, and making a false claim to the Department of Defense. Sellman and Ward were assigned to oversee fuel deliveries to Bagram Airfield in Afghanistan under the Logistics Civil Augmentation Program ("LOGCAP") support contract. The indictment alleges that, between May and September 2006, Sellman and Ward conspired to accept bribes from truck drivers employed by British company Red Star Enterprises Limited in return for falsifying government documents indicating receipt of the fuel and then diverting fuel for sale outside the airfield. According to the indictment, the conspiracy involved over 784,000 gallons of fuel worth more than $2.1 million. On January 25, 2008, Ward pleaded guilty to conspiracy to receive bribes, making false statements and filing false claims. He admitted to joining the conspiracy in August 2006 and receiving bribes from several drivers. In April 2008, Ward was sentenced to 26 months in prison and three years of supervised release. Ward was also ordered to pay $216,000 in restitution to the Defense Energy Support Center headquartered at Fort Belvoir. In May 2008, Sellman was sentenced to 26 months in prison, three years of supervised released, and was ordered to pay $675,000 in restitution to the Defense Energy Support Center.