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US: Ex-Halliburton Executive Charged with Fraud

The 10-count indictment alleges that Jeff Alex Mazon, a former procurement officer for Halliburton subsidiary KBR Inc., and Ali Hijazi, a businessman in Kuwait, developed a scheme to defraud the government out of millions of dollars by inflating bids on the tanker contract.


by John O'ConnorAssociated Press
March 17th, 2005

SPRINGFIELD, Ill. -- Federal authorities on Thursday charged a former employee of a Halliburton subsidiary and another man with defrauding the U.S. military on refueling tankers used at a Kuwait airport.

The 10-count indictment alleges that Jeff Alex Mazon, a former procurement officer for Halliburton subsidiary KBR Inc., and Ali Hijazi, a businessman in Kuwait, developed a scheme to defraud the government out of millions of dollars by inflating bids on the tanker contract.

Neither KBR nor Houston-based Halliburton is named in the indictment. U.S. Atty. Jan Paul Miller, who announced the indictment in Springfield, refused to say whether either company is being investigated.

"These charges have been brought to address the alleged waste and abuse of U.S. taxpayers' money, and the reprehensible squandering of money meant to support U.S. troops,'' Miller said. "Let's be absolutely clear: Any attempt to abuse government contracts and pocket money illegally will not be tolerated, it will be prosecuted.''

The indictment came from a federal grand jury in Illinois because the Army Field Support Command at the Rock Island Arsenal oversees the military contract that included the tanker deal.

Mazon accepted bids on the tankers in 2003 from Hijazi's company, LaNouvelle General Trading and Contracting Co., according to the indictment. He then allegedly inflated LaNouvelle's bid to $5.5 million on a project KBR estimated would cost $680,000. Miller said Mazon also secretly inflated the bid of the other company to make LaNouvelle's bid appear to be lower.

Hijazi allegedly paid Mazon $1 million for the favorable treatment.

Miller said KBR brought the matter to the government's attention last year and said Mazon, who no longer works for the company, was arrested Wednesday in Georgia. Hijazi is not in custody and Miller refused to say whether authorities know where he is.

Miller would not comment on how the alleged scheme escaped the government's notice. He said the investigation continues but would not elaborate.

Dan Carlson, an Army Field Support Command spokesman, said the government since 2001 has paid KBR $7.6 billion of an $11.6 billion contract for supplying troops in the Iraqi war. He did not immediately respond to questions about the indictment.

Mazon and Hijazi each face four counts of major fraud against the United States -- one for each of the four invoices on which the government paid KBR for the tankers, Miller said. In all, Mazon had KBR submit six invoices to the government, which did not pay the last two, according to Miller. He said KBR repaid the money it received for the first four invoices, but not know how much money it involved.

The two defendants also face six counts each of wire fraud. For each count of major fraud, each faces as much as 10 years in prison and a $5 million fine if convicted. Conviction on each count of wire fraud carries a sentence of as much as 20 years in prison and a fine of $250,000.

Vice President Dick Cheney headed Halliburton from 1995 to 2000, and Democratic members of Congress have repeatedly questioned whether Halliburton and its subsidiaries received favored treatment because of its connections. Cheney and other administration officials have denied Cheney had any role in Halliburton's government contract work.





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