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Kerry Khan & Lee Khan plead guilty in USACE bribery scandal

“Today the ringleader of the largest bribery and bid-steering scheme in the history of federal contracting accepted responsibility for his crimes,” said U.S. Attorney Machen. “For his shocking abuse of his position of power, Kerry Khan faces more than two decades in prison. The homes, cars, and jewelry he financed with bribes and kickbacks have now been returned to their rightful owner – the American taxpayer.
U.S. Attorney Ronald C. Machen

Second Former U.S. Army Corps of Engineers Manager Pleads Guilty in Alleged $30 Million Bribery and Kickback Scheme

Scam Involved Steering of Government Contracts; Official’s Son Also Pleads Guilty to Charges Today
(DoJ) – WASHINGTON – Kerry F. Khan, 54, a former program manager for the U.S. Army Corps of Engineers, pled guilty today to federal charges of bribery and conspiracy to commit money laundering in a scheme that allegedly involved more than $30 million in bribes and kickback payments and the planned steering of a government contract potentially worth $1 billion.

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That bird won’t fly and other news

Hold that Revolving Door! Four-Star General Coming Through
Dana Liebelson – (POGO) – January 28, 2012 – The revolving door that carried former Department of Defense honcho William Lynn III to a well-paying job with an Italian defense contractor keeps on spinning – now Gen. James Cartwright, who retired as the nation’s second-highest ranking military officer in August, is following Lynn into the private sector.

Cartwright is joining the Board of Directors at Raytheon, a major U.S. defense contractor. Earlier in the week, DRS Technologies named Lynn as its chief executive officer. (Coincidently, before Lynn was tapped as deputy defense secretary, he was a top lobbyist for Raytheon.)

“General Cartwright’s deep understanding of defense and broad experience in military operations and matters of national security will be of great value to our Board,” Raytheon Chairman and CEO William H. Swanson said in a press release.

Well, Cartwright certainly has a deep understanding of defense: He’s a four-star general with 40 years of service in the Marine Corps, including four years as the Vice Chairman of the Joint Chiefs of Staff. But then there’s that sticky “great value to the Board” comment. And that’s where the problem with the well-oiled revolving door that leads from the Pentagon to the defense industry rears its ugly head. (Click HERE for article)

Former United Nations Employee Sentenced to 18 Months in Prison
(DoJ) – WASHINGTON – January 27, 2012 – Jeffery K. Armstrong, 52, of South Riding, Va., was sentenced today to 18 months in prison for obtaining more than $100,000 in salary payments by fraudulently holding concurrent jobs at the United Nations (U.N.) and the National Labor Relations Board (NLRB). He was ordered to serve a three-year term of supervised release following his sentence and to pay $128,153 in restitution.

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Not so fast and other news

Contractor linked to mistaken deaths
After deaths of 15 Afghans in 2010, Army learned that U.S. civilian played a role using drone video feeds.
David S. Cloud – (STL Today) – WASHINGTON – December 31, 2011 – After a U.S. airstrike mistakenly killed at least 15 Afghans in 2010, the Army officer investigating the accident was surprised to discover that an American civilian had played a central role: analyzing video feeds from a Predator drone keeping watch from above.

The contractor had overseen other analysts at Air Force Special Operations Command at Hurlburt Field in Florida as the drone tracked suspected insurgents near a small unit of U.S. soldiers in rugged hills in central Afghanistan. Based partly on her analysis, an Army captain ordered an airstrike on a convoy that turned out to be carrying innocent men, women and children.

“What company do you work for?” Maj. Gen. Timothy McHale demanded of the contractor after he learned that she was not in the military, according to a transcript obtained under the Freedom of Information Act.

“SAIC,” she answered. Her employer, SAIC Inc., is a publicly traded Virginia-based corporation with a multiyear $49 million contract to help the Air Force analyze drone video and other intelligence from Afghanistan.

America’s growing drone operations rely on hundreds of civilian contractors, including some, such as the SAIC employee, who work in the so-called kill chain before Hellfire missiles are launched, according to current and former military officers, company employees and internal government documents. (Click HERE for article)

Obama Signs Defense Authorization Bill
Sara Sorcher – (National Journal) – December 31, 2011 – President Obama signed on Saturday the defense authorization bill, formally ending weeks of heated debate in Congress and intense lobbying by the administration to strip controversial provisions requiring the transfer of some terror suspects to military custody.

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Eyak & Army Corps of Engineers employees arrested for bribery, contracting scam (Updated)

  • Click HERE to read the indictment (PDF)
  • Eyak was awarded new DoD contracts on September 14 and October 3, 2011:
    United States DoD contracts for September 14, 2011
    Eyak Technology, L.L.C., Dulles, Va., is being awarded an $8,903,000 firm-fixed-priced delivery order MU65 against an existing U.S. Army Corps of Engineers Technology for infrastructure, geospatial, and environmental requirements indefinite-delivery/indefinite-quantity contract (W912HZ-09-D-0003) for the procurement, kitting, marking, and integration of different varieties of kits for the Marine Air Ground Taskforce (MAGTF) Secondary Imagery Dissemination System (MSIDS). MSIDS provides the only self-contained, hand-held, ground-prospective imagery capability for MAGTF reconnaissance units. Work will be performed in Colorado Springs, Colo., and is expected to be completed by Sept. 13, 2012. Contract funds in the amount of $33,372 will expire at the end of the current fiscal year. The delivery order was not competed. Marine Corps Systems Command, Quantico, Va., is the contracting activity.

    United States DoD contracts for October 3, 2011
    Eyak Services, LLC, Falls Church, Va., was awarded a $9,099,274 firm-fixed-price contract. The award will provide for the support services for Field Force Engineering Command Control System Readiness Operations. Work will be performed in Washington, D.C.; Seoul, Korea; and Winchester, Va.; with an estimated completion date of Sept. 27, 2012. One bid was solicited, with one bid received. The Army Corps of Engineers, Vicksburg, Miss., is the contracting activity (W912HZ-11-C-0069).

    Two U.S. Army Corps of Engineers Employees and Two Others Indicted in $20 Million Bribery and Kickback Scheme Involving Government Contracts – Defendants Arrested Today as Authorities Seize Millions in Assets

    (DoJ) WASHINGTON – October 4, 2011 – Four Virginia men, including two longtime employees of the U.S. Army Corps of Engineers, were arrested today on charges stemming from an indictment that accuses them of taking part in a conspiracy involving more than $20 million in bribes and kickback payments and the planned steering of a $780 million government contract to a favored contractor.

    The arrests were announced by U.S. Attorney Ronald C. Machen Jr.; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS); Jeannine A. Hammett, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI), and James K. Podolak, Director of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit.

    The defendants include Kerry F. Khan, 53, of Alexandria, Va.; his son, Lee A. Khan, 30, of Fairfax, Va.; Michael A. Alexander, 55, of Woodbridge, Va., and Harold F. Babb, 60, of Sterling, Va. Kerry Khan and Alexander are employed by the U.S. Army Corps of Engineers, and Babb is director of contracts for a company that did business with the government.

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