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Ex-Halliburton employee indicted
Former worker at Halliburton unit KBR charged with attempt to defraud military of $3.5 million.
March 17, 2005: 2:00 PM EST

WASHINGTON (CNN) - A former employee of Halliburton subsidiary Kellogg, Brown and Root has been indicted on fraud charges in connection with a military contract in Kuwait, the Justice Department announced Thursday.

Jeff Mazon faces a 10-count indictment on charges that he devised a scheme to defraud the government of more than $3.5 million in the awarding of a subcontract to a firm that supplied fuel tankers for military operations in Kuwait.

Mazon, 36, is charged along with Ali Hijazi, the managing partner of the subcontractor LaNouvelle Trading and Contracting Co., a Kuwaiti firm. Hijazi, who is not a U.S. citizen, remains at large, officials said.

"Especially in a time of war, the relentless pursuit of those who would fraudulently divert money for their own benefit must be a high priority," said Washington Assistant Attorney General Chris Wray in a statement.

Mazon, who was indicted by a federal grand jury in Peoria, Ill., was arrested Wednesday night in Norcross, Ga. He is scheduled to appear in a federal court in Atlanta Thursday, before being transferred to Rock Island, Ill., for further court proceedings.

Halliburton spokeswoman Wendy Hall said the former KBR employee is the first person associated with either company to be indicted on the matter.

Mazon was the procurement materials and property manager for KBR, responsible for negotiation and oversight of subcontracts for the firm's prime contract with the U.S. Army, according to the indictment.

Under the scheme, Mazon allegedly inflated bids, which led to payments of more than $5.5 million for a project that KBR had estimated would cost $680,000.

Hijazi allegedly presented Mazon with a $1 million check for favorable treatment of LaNouvelle, the Justice Department said.

"KBR has fully cooperated with DOJ in the investigation and will continue cooperating with government investigators throughout the remainder of the process," the company said in a statement.

If convicted, Mazon could be sentenced to 10 years in prison on each of four counts of fraud and up to 20 years for each of six counts of wire fraud. He would also face potential penalties of up to $5 million or twice the amount of any illegal gains.

Announcement of the indictment was made by U.S. Attorney Jan Paul Miller in Springfield, Ill.

Halliburton (up $1.28 to $43.18, Research) shares rose 2.5 percent in afternoon New York Stock Exchange trading.

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-- from CNN Producer Terry Frieden  Top of page

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