Huh...
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Accusations involved steering contracts in return for kickbacks.
WASHINGTON -- A former Alaska Native corporation executive on Tuesday admitted his role in a $28 million bribery scheme involving the awarding of government contracts and is cooperating with prosecutors in their continuing investigation.
A bribery conviction carries a possible sentence of up to 15 years in prison and the unlawful kickbacks charge can carry up to 10 years, though Babb is likely to face a much shorter sentence because of his guilty plea and cooperation.
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Without Prejudice UCC 1-207
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Accusations involved steering contracts in return for kickbacks.
WASHINGTON -- A former Alaska Native corporation executive on Tuesday admitted his role in a $28 million bribery scheme involving the awarding of government contracts and is cooperating with prosecutors in their continuing investigation.
Harold F. Babb, 60, pleaded guilty in federal court in
Washington to one charge each of bribery and unlawful kickbacks. Babb,
then director of contracts at Eyak Technology LLC, was arrested in
October along with three other men, including two employees of the U.S.
Army Corps of Engineers. Prosecutors say their investigation has
unmasked one of the largest and most brazen government procurement
frauds in history.
"It took me a while to come to terms (with), but I am guilty," Babb told a federal judge before entering his plea.
Babb, who has been in custody since his arrest, admitted participating in a complex, far-ranging scheme.
Eyak Technology is a subsidiary
of Eyak Corp., the Cordova Native village corporation. The bribery and
kickback scandal has shed unwanted light on the special privileges
available to Alaska Native corporations, which can obtain large
government contracts without competitive sealed bidding. Congress has
been investigating whether those privileges have benefited Native
shareholders and have given the government value for its money.
Prosecutors say the fraud involved contracts steered to favored
subcontractors for kickbacks, contracts awarded through bribery and the
submission of phony and inflated invoices for payment. Authorities say
the illicit proceeds of the scheme were split among multiple defendants
and used to purchase clothing, real estate, cars, fine jewelry and other
luxuries.
A bribery conviction carries a possible sentence of up to 15 years in prison and the unlawful kickbacks charge can carry up to 10 years, though Babb is likely to face a much shorter sentence because of his guilty plea and cooperation.
"Mr. Babb decided to accept
responsibility and cooperate with the government and move on his with
his life," his lawyer, Jeffrey Jacobovitz, said after the plea hearing.
Eyak Technology has operations in Virginia and the prime contractor
for a lucrative contract with the Army Corps of Engineers. EyakTek, in
turn, had multiple subcontractors, including Nova Datacom and Big Surf
Construction Management.
Babb admitted to accepting more than $1
million in kickbacks from Nova Datacom's chief technology officer, Alex
N. Cho, in exchange for giving the subcontractor preferential treatment,
and to paying more than $7 million in bribes in return for approval on
Army Corps of Engineers contracts and subcontracts, according to
authorities.
Babb was arrested along with two
Army Corps of Engineers employees, Kerry F. Khan and Michael A.
Alexander, and Khan's son, Lee Khan. Alexander pleaded guilty last month
to bribery and conspiracy. Prosecutors initially described the scheme
as totaling $20 million, but they say the scope of the fraud has
increased to $28 million as new bribes and kickback payments have been
discovered.
In a prepared statement, the
Justice Department described the case as "one of the largest procurement
fraud cases in history."
Since the initial arrests,
prosecutors also have revealed charges against a handful of other men
associated with subcontractors, including Cho, who pleaded guilty last
September to money laundering, conspiracy and other charges.
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