"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Saturday, July 21, 2007

Set Smoot Free !!!!!

You have feel sorry for Smoot. That's 43 year old Kevin Andre Smoot, of The Woodlands, Texas, yesterday waived indictment and pleaded guilty to making a false statement and violation of the Anti-Kickback Act .

He 's going to be sentenced on December 14, 2007, in Rock Island, Illinois, and faces ;

1. Maximum statutory penalty for violating the Anti-Kickback Act - 10 years in prison, and a fine of up to $250,000.
2. Making a false statement, up to 5 years in prison and a fine of up to $250,000.

Sheeeeeit!! that's 15 years and half a million bucks ! He must be some mean guy!

Well Kevin was the Managing Director of EGL Houston office , a freight forwarding company. (Eagle USA Airfreight opened their first freight terminal in Houston in 1984)

The US Army has a program and it has an acronym LOGCAP (Logistics Civil Augmentation Program) whwreby civialian services augment the military and in December 2001 1 LOGCAP III was awarded to KBR (which was Kellogg, Brown Root a subsidiary of Halliburton).

EGL had a contract with KBR to ship military cargo to Iraq. (EGL (a FORTUNE Most Admired Company 2006and 2007) were taken over in May 2007 by CEVA Group Plc (formerly TNT Logistics) which is in turn CEVA is owned by affiliates of Apollo Management VI, L.P., one of the leading private equity investors in the world. )

Whilst administering this contract Smoot accepts providing gratuities / bribes / kickback to a total of US $25,337 to KBR workers on 90 separate occasions between early 2002 and the spring of 2005 (say 3 years = US7-8,000 a year). he also authorizeed a subordinate at EGL to provide an additional $8,500 in perks.

The perks included meals, drinks and golf outings, as well as rodeo, football and baseball tickets says United States Attorney Rodger A. Heaton in a Press release.

The other charges realte to , Christopher Cahill, who was higher up than Smoot in EGL and served as regional vice president for the Middle East and India for EGL who was stationed at its regional office in Dubai. In August last year he pleaded guilty to inflating invoices for military shipments to Baghdad through EGL’s s subcontract with Kellogg, Brown and Root (KBR) under the LOGCAP III prime contract - he got 30 months in jail.

Cahill’s scheme was to inflate invoices by adding a risk surcharge of $.50 for each kilogram of freight transported to Baghdad. Cahill added the surcharge after learning that an EGL competitor was seeking war risk insurance to resume air cargo flights into Baghdad subsequent to cargo plane of a competitor had been shot down in Iraq in November 2003. At the time, however, Cahill knew that the air charter company EGL had contracted with to perform the air cargo flights had not instituted such a fee.

Smoot admitted that at the time he was interviewed, (by Defense Criminal Investigative Service (DCIS), )on or before November 2004, he knew the war risk surcharges were not legitimate and that as of March 2005, he knew that Cahill had caused false documents to be created to conceal the fraudulent nature of the war risk surcharges.

From November 22, 2003, through July 20, 2004, EGL performed approximately 379 air cargo 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 war risk surcharges.

The increased profits from the war risk surcharge were initially credited to EGL regional office but were later credited to EGL' s Houston headquarters ultimately resulting in an increase in the incentive bonus paid to Smoot for fiscal year 2004.

So Smoot has been glad handing some of the KBR guys in the loose change that lubricates business throughout the USA and the free world and he rode with a scheme by a superior to inflate bills for the military - which helped pay his annual bonus.

Now on the scheme of thieving that went on in Iraq, this is not even petty cash.... US$Billion s have been lost at the Pentagon, dollar bill packs used as footballs...In 2003, the Congress appropriated nearly $21 billion to the Iraq Relief and Reconstruction Fund (IRRF) reports of theft, dishonesty, waste, mismanagement, delay, influence and corruption peddling are stacked a mile high by Stuart W. Bowen Jr., who runs the Office of the Special Inspector General for Iraq Reconstruction (SIGIR) of whom Representative Henry A. Waxman of California said “What is clear is that he has done a superb job uncovering waste, fraud and abuse in Iraq.” ... now the White House has now tried to shut him up.

Smoot isn't a crook. Smoot gave kickbacks. Smoot lied. Smoot 'fessed up.

Set Smoot Free !
UPDATE 23rd July 2007 12.00EST Well, Well, Well Kellogg Brown Root in Houston have just been rootin' around our story about Kevin... Starting a Set Smoot (and the KBR 5) Free Party ?


Anonymous said...

I totally agree with your comments...I personally know Kevin and he is one of the nicest people I have ever met...he is a true friend - the kind that you can count on when you have a problem - any time, day or night. I have a feeling he was just too loyal and that is why he did not initially "talk"...as far as the "kickbacks" go, everyone in the Marketing industry wines and dines their potential customers so that is just the way it is...everyone does it...and in my opinion, KBR employees are not actually Government employees - the Government does need to look at what THEY are doing, not just what Kevin did...

Shutter said...

Please send him our regards, and best wishes. Sounds like he had a misplaced loyalty to his superiors - which many of us do - who tells the wife the boss is screwing his secretary ?

OK he dispensed US$32K over 3 years ...what does anyone think those private boxes at the football stadiums ,etc are for ?

If you want to find real bribery go and have a look at the pharma industry.

'bout time we organised some T shirts, buttons and bumper stickers.

Anonymous said...

I also personally know Kevin and he is one of the greatest people I have ever met. He has a huge heart any IS very loyal. If he is guilty of "entertaining" Customers, then I guess everyone that is in this business should be considered guilty.

Anonymous said...

also having known Kevin for a very long time...the real criminals are the government officals who knowingly accepted the lunches, dinners, and golf knowing full well they should not be doing so. What about the EGL VP of Finance who audited his expense reports every week? Of that's right, throw Kevin under the bus so they can walk free and count their cash from the recent buy out.

Anonymous said...

Once again, I TOTALLY agree with you (I am the original Anonymous poster)...why has Kevin been singled out as the lone scapegoat for this whole mess with his name now splattered all over the place. I know how nice he is but if I were him I would sing like a canary now...No one is stepping up to the plate for him...But I would be a character witness if he were to ask...The KBR/Halliburton employees continued to feed off of his kindness...the contract was already had, so he wasn't "bribing" anyone...he has always been extremely generous...that is just his nature...he wants everyone to have a good time and looks like everyone did at his expense. It is not fair at all.

Shutter said...

Lord Patel is a lousy Limey, not without some knowledge and experience of the Land of the free.

It is fascinating how by picking this up from 4,000 miles away it has generated so much attention , the peekers from EGL, KBR, Washington State Agencies, and evidently private folks from Texas shows a lot of interest.

Lord Patel is happy to help to get a collective voice together - but maybe you should just write to the Judge in Illinois and Attorney Heaton. It cannot be too late to make representations.

Anonymous1 said...

Guys don't let me start on this subject. People who should be punished for what they are STILL doing are people like Domestic Operation Manager at EGL ORD terminal Frank A. Vecchio who takes money under the table from EGL Drivers (owner operators) especially guy named Vergil Roland.

Anonymous1 said...

I could go on and on about things that happen at EGL ORD-Elk Grove Village Terminal ... but why just come in and ask the drivers themselves they will tell you. Too bad that Huston doesn't seem to take a notice and instead they let go good guys.

fellow_friend said...

I worked personally for Kevin for about 6 months and during that time I grew to know a man with a heart of gold. He gave me a chance when no one else would. I will always appreciate that about him. He was great person to work for too. He always made sure that I was included in everything. I think what happened to him was just wrong.

Just my 2 cents.

Shutter said...

Thnx for yr comment fellow friend. let's hope Smoot knows there is one Limey rooting for him and oplenty of locals.

It would be nice to hear from him directly....and get in touch.

(C) Very Seriously Disorganised Criminals 2002/3/4/5/6/7/8/9 - copy anything you wish