Whistleblower $108.75 million settlement with KBR

In a landmark victory for whistleblowers and taxpayers, a settlement has been reached in a case against KBR, an ex-Halliburton subsidiary, wherein the company was alleged to have knowingly over-ordered $340 million worth of materials during its performance.

After a lengthy legal battle, two whistleblowers Geoffrey Howard, and Zella Hemphill Anderson, have successfully settled with KBR Services for $108.75 million, marking the largest cash settlement ever obtained for alleged Iraq War fraud. The former KBR employees filed a lawsuit under the “qui tam” provisions of the False Claims Act, claiming that KBR defrauded the United States Army by overcharging for supplies and materials. Despite the widespread reports of fraud and abuse during the War, this is the first case to recover such a substantial sum for alleged fraud.

The lawsuit alleges that KBR routinely ordered new materials when excess quantities of the same items were sitting in KBR warehouses in Iraq, resulting in massive amounts of excess material paid for by U.S. taxpayers. According to the whistleblowers, KBR was indifferent to this massive waste because the Army reimbursed KBR for all these unnecessary costs, plus profit. However, according to the complaint, the whistleblowers’ internal complaints to the company were routinely ignored.

Despite the Justice Department declining to join the case, the whistleblowers litigated the case for over a decade, reviewing millions of documents and taking testimony from dozens of witnesses. Their extraordinary effort paid off, and the whistleblowers will receive 29% of the recovery achieved.

KBR is a massive company that rarely settles out of court, making this settlement agreement highly unusual. The government monitored the case and participated in the settlement, a significant victory for U.S. taxpayers. The whistleblowers and their counsel express their appreciation to Trial Attorney Kelley Hauser, who represented the United States. This case is a testament to whistleblowers’ power and the legal system’s effectiveness in holding companies accountable for fraud.

This case serves as a reminder that justice can prevail, even against the most powerful entities. It demonstrates the importance of speaking out against wrongdoing and standing up for what is right. The brave actions of these whistleblowers have not only brought justice in this particular case but also inspired others to fight against fraud and corruption.

Helmer Friedman LLP helping you navigate through the state and federal whistleblower programs that may reward you for reporting fraud.

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