New class action accuses Halliburton of accounting fraud
6 Aug. 2004
WASHINGTON, Aug. 6 (HalliburtonWatch.org) -- Four former employees of Halliburton filed a class action lawsuit against their former employer, alleging the company engaged in "systemic" accounting fraud from 1998 to 2001, the New York Times reported. The class action, filed in a Dallas federal court, does not accuse Vice President Dick Cheney of any wrondoing, but the alleged fraud occurred during Cheney's tenure as CEO.###
Halliburton and four former and current executives are accused of illegally inflating profits and understating losses on financial statements regarding the Kellogg Brown & Root subsidiary (now known as KBR). The former employees say Halliburton overbilled for services, overstated the amounts it was owed by customers and understated amounts it owed to vendors. A former employee in the accounting department said supervisors had told her to do "whatever it took" to make profit statements appear more profitable than was actually the case. The class action further claims Halliburton misled investors when it said asbestos liabilities incurred from the purchase of Dresser Industries in 1998 were not material or adverse to the company's bottom line.
Named as defendants in the class action are Halliburton Co., chief executive David J. Lesar; former chief financial officer Douglas L. Foshee; retired chief financial officer Gary V. Morris; and former company controller Robert Charles Muchmore Jr.
The law firm which filed the lawsuit is Scott & Scott of Colchester, CT. The firm opted-out of a 2003 class action settlement to pursue its own class action claims. The 2003 settlement was preliminarily approved by a Houston federal court on June 7.
On Aug. 3, Halliburton settled an accounting fraud investigation by the Securities and Exchange Commission for $7.5 million.
NY Times: Suit Accuses Halliburton of Fraud in Accounting
Reuters: Halliburton Accused of Fraud in Lawsuit
Plaintiff opposes settlement of Halliburton accounting fraud lawsuit
Halliburton settles accounting fraud probe for $7.5 million