Former Texas exec pleads guilty to military contract kickbacks
Houston Chronicle© 2007 The Associated Press
July 21, 2007
ROCK ISLAND, Ill. — A second former executive of a global logistics company has pleaded guilty in U.S. District Court to receiving kickbacks on Iraq war contracts and lying to federal investigators.
Kevin Andre Smoot, 43, faces up to 15 years in prison and $500,000 in fines after pleading guilty Friday to making a false statement and violation of the Anti-Kickback Act before U.S. District Judge Michael M. Mihm.
Smoot, of The Woodlands, Texas, a Houston suburb, was the managing director of Eagle Global Logistics, Inc.'s freight forwarding station in Houston.
Christopher Cahill, the company's former regional vice president for the Middle East and India, plead guilty and was sentenced in August 2006 to 30 months in prison for inflating invoices for military shipments to Baghdad through EGL's subcontract with a Haliburton subsidiary named Kellogg, Brown and Root.
The contracts were awarded under LOGCAP III, an Army program that uses civilian contractors to support the logistical needs of the U.S. military, and were administered by the Army Field Support Command at the Rock Island Arsenal.
Jeffrey B. Lang, supervisory assistant U.S. Attorney, Rock Island Division, has prosecuted a number of company executives for war profiteering schemes since the Iraq War began.
Smoot admitted in court that he lied to federal investigators in November 2004 and again in March 2005.
He was being questioned about Cahill's scheme to inflate invoices by adding a "war risk surcharge" of 50 cents for each kilogram of freight transported to Baghdad. Cahill added the surcharge for air cargo flights into Baghdad after a competitor's cargo plane had been shot down in Iraq in November 2003.
Smoot further admitted that from January 2002 through April 2005, he gave more than $33,000 worth of entertainment to five Houston-based KBR transportation department employees for favorable treatment in getting subcontracts, a violation of the Anti-Kickback Act.
The gratuities included food, drinks, golf outings, tickets to rodeo events, baseball and football games and other entertainment events.
From Nov. 22, 2003, through July 20, 2004, EGL flew 379 shipments of military goods from Dubai to Baghdad under EGL's subcontract with KBR. The total amount of the EGL invoices was approximately $13.26 million including $1.14 million in fraudulent charges.