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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Government Fraud Counterclaims in LOGCAP Dispute

In response to a lawsuit filed by KBR seeking approximately $41 million the government ordered KBR to return under the Logistics Civil Augmentation Program (“LOGCAP”) III contract, the Department of Justice filed counterclaims alleging KBR managers received kickbacks from dining facility (“DFAC”) subcontractor Tamimi Global Company in violation of the False Claims Act and the Anti-Kickback Act. The government claimed that from late 2002 through 2003, KBR regional food services manager Terry Hall and his deputy, Luther Holmes, received more than $45,000 in kickbacks from Mohammad Shabbir Khan, vice president of Tamimi, in return for awarding the company more than $400 million in subcontracts. The Department of Justice alleged that the “taint” of the kickbacks should cause KBR to forfeit its claims against the government. In 2006, Khan was sentenced to 51 months in prison for paying kickbacks to KBR employee Stephen Lowell Seamans, who was sentenced to 12 months in prison for accepting the kickbacks in return for helping Tamimi win two DFAC subcontracts in Iraq and Kuwait worth $21.8 million (see KBR instance, “KBR Employee Sentenced for Accepting Kickbacks”). In September 2011, Tamimi paid $13 million and entered a deferred prosecution agreement to settle U.S. criminal and civil charges. After a trial, in April 2012 the U.S. Court of Federal Claims awarded KBR $11,792,505 plus interest accrued since July 2008. However, the court awarded the government $38,000 in civil penalties on its Anti-Kickback Act counterclaim, holding KBR strictly liable for the kickbacks taken by Hall and Holmes.

Misconduct Type
Government Contract Fraud
Enforcement Agency
Justice
Contracting Party
Defense - Army
Court Type
Civil
Disposition
Judgment Against Defendant
Date of Government Counterclaims
3/15/2011
Contractors Involved Penalty
Total
KBR $38,000
Further Information Released
Opinion and Order 5/9/2012
Judgment 5/2/2012
DOJ Press Release 5/21/2011
Government Answer and Counterclaims 5/21/2011

See also:

Federal Contractor Misconduct Database