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Military Contractor Settles Anti-Kickback Case for $375,000

Panalpina Inc., a Swiss-based contracting company, has agreed to settle a False Claims Act and Anti-Kickback case with the government which alleged that the company illegally paid kickbacks to another military contractor to secure subcontracting work.  Panalpina allegedly paid kickbacks to Kellogg Brown and Root, Inc., a logistics firm under contract with the U.S. Army to provide logistic support in Iraq and other areas.  Panalpina will pay the government $375,000 to settle these allegations.

Specifically, the government alleged that Panalpina gave meals, drinks, concert tickets, sport tickets, and golf outings to members of KBR’s transportation division in order to secure favorable treatment on subcontracts awarded under KBR’s logistics contract with the Army.  These payments allegedly violated the Anti-Kickback Statute as well as the FCA because illegal kickbacks are considered a false claim under the Act.

The case was originally filed by two whistleblowers who worked in the industry, David Vavra and Jerry Hyatt.  The two whistleblowers will receive $78,750 as a reward for their participation in the case.