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Twenty guilty pleas (so far) in ‘history’s biggest’ federal contracting bribery probe

Young N. Cho, aka Alex Cho, 43, of Great Falls, Virginia, was sentenced Thursday to 88 months in prison on federal charges that he paid millions of dollars in bribes to corrupt officials from the U.S. Army Corps of Engineers in return for government contracts.

Cho pleaded guilty in September 2011 in federal court in the District of Columbia to one count of conspiracy to commit bribery and money laundering and to defraud the United States, and one substantive count of bribery. 

Judge Emmet Sullivan also ordered Cho to pay about $7.7 million in restitution to the U.S. Army Corps of Engineers and to forfeit $6.9 million.

In addition to Cho, 19 other individuals and one corporation, Nova Datacom LLC, have pleaded guilty to federal charges.

“The investigation uncovered the largest domestic bribery and bid-rigging scheme in the history of federal contracting cases,” the DOJ said.

The defendants stole over $30 million in government money through fake invoices. And they plotted to rig a bid on a government contract worth nearly $1 billion.

Through forfeiture, restitution, and civil settlements, the DOJ has recovered most of the stolen money, the agency said.

Cho was the chief technology officer for Nova Datacom. Three other defendants worked closely with Cho and Nova Datacom during the conspiracy.

Kerry F. Khan and Michael A. Alexander were former program managers for the U.S. Army Corps of Engineers, and Harold F. Babb was the former director of contracts at Eyak Technology LLC (EyakTek), an Alaska Native-owned small business. 

All three have pleaded guilty. Khan was sentenced to 19 years and seven months in prison. Alexander was sentenced to six years in prison, and Babb was sentenced to seven years and three months in prison.

Between 2007 and 2011, Cho paid $700,000 in kickbacks to Babb to speed up processing and payment of Nova Datacom’s invoices.

Cho also paid over $17 million in bribes to Khan and about $1 million to Alexander to obtain and retain government contracts. And he tried to rig a bid to steer a nearly $1 billion planned government contract to Nova Datacom.

From 2008 to 2011, Nova Datacom submitted invoices for equipment and services to the U.S. Army Corps of Engineers for $45 million. Of that amount, Cho admitted that over $18 million was inflated or fictitious, the DOJ said.

Acting U.S. Attorney Vincent Cohen said, “Cho is just one of 20 crooked contractors, government officials and other middlemen who have pled guilty as part of this investigation.”


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.


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