Military contractor guilty in fraud case

Associated Press
Published February 18, 2006

ROCK ISLAND, Ill. - A former executive for a company hired by a Halliburton Co. subsidiary to ship military cargo into Iraq has pleaded guilty to inflating invoices by $1.14-million to cover fraudulent surcharges.

Christopher Joseph Cahill pleaded guilty Thursday in federal court in Rock Island.

Cahill, 51, of Katy, Texas, was a regional vice president based in Dubai, United Arab Emirates, for Eagle Global Logistics, a Houston-based company that won a war contract from Halliburton subsidiary Kellogg, Brown & Root in 2002, according to court papers.

The company was hired to fly freight into Baghdad from Dubai.

Cahill's fraud scheme began in November 2003. Cahill learned that a rival carrier was seeking a new form of war-risk insurance and added a similar surcharge of 50 cents for every kilogram of freight on Eagle flights, according to court records.

He claimed the charter service that carried freight for Eagle had instituted the new charge but knew that the charter service had not done so, court papers said.

Cahill's attorney, Edward Chernoff, said his client didn't get any money for himself through the surcharges. He said his client figured, "If they can get paid for the insurance, why shouldn't we be paid for being self-insured?"

Cahill, who is to be sentenced May 26, faces up to 10 years in prison and a fine of $5-million.

Halliburton, a Houston-based oil field services company, has been criticized since the beginning of the war in Iraq for multibillion-dollar government contracts. Vice President Dick Cheney was its chief executive from 1995 to 2000.