FOR IMMEDIATE RELEASE CIV

WEDNESDAY, AUGUST 2, 2006 (202) 514-2007

WWW.USDOJ.GOV TDD (202) 514-1888

Houston-based Egl Inc. Pays United

States $4 Million;
Allegedly Inflated Costs for Iraq
Military Cargo Shipments
WASHINGTON – EGL, Inc. has paid the United States $4 million to settle
potential civil claims under the False Claims Act based on the company’s alleged
inflation of invoices for military cargo shipments to Iraq, the Justice Department
and Matthew D. Orwig, the U.S. Attorney for the Eastern District of Texas,
announced today. Houston-based EGL, operating as Eagle Global Logistics, was a
subcontractor for Kellogg Brown and Root, the prime contractor for the U.S.
Army’s Logistics Civil Augmentation Program (LOGCAP III) contract for logistical
support of military operations overseas.

Christopher Joseph Cahill, EGL’s former regional vice-president for the Middle
East and India, had previously pleaded guilty in the U.S. District Court for the
Central District of Illinois, in a case prosecuted by the U.S. Attorney’s Office in
Springfield, Ill., and the Criminal Division of the Justice Department, to adding
$1.14 million in fraudulent “war risk surcharges” to the invoices. The invoices were
for shipments of military goods from Dubai to Iraq from late November 2003
through July 2004. Cahill also admitted that when he became aware of a
government investigation of EGL’s charging of the war risk surcharges, he directed
a subordinate to create fraudulent invoices purporting to show war risk surcharges
billed to EGL.

“The Justice Department remains committed to vigorously pursuing all those who
defraud the military, particularly in a time of war,” said Peter D. Keisler, Assistant
Attorney General for the Justice Department’s Civil Division.

The war risk surcharge allegations arose in a suit filed against EGL under the qui
tam or whistleblower provisions of the False Claims Act. Under the whistleblower
provisions of the False Claims Act, private parties can file an action on behalf of the
United States and receive a portion of the proceeds of a settlement or judgment
awarded against a defendant. As a result of today’s settlement, David Vavra and
Jerry Hyatt will receive $800,000 as their relator’s share.

The Defense Criminal Investigative Service; Federal Bureau of Investigation;

Internal Revenue Service, Criminal Investigation Division; and the U.S. Army
Criminal Investigation Division all have participated in the investigation.

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