Father and son plead guilty in multimillion-dollar federal bribery scheme

May 18, 2012

The Washington Post on May 18, 2012 released the following:

“By Clarence Williams

A former program manager for the Army Corps of Engineers and his son pleaded guilty Thursday to federal charges in a scheme that paid out more than $30 million worth of bribes and kickbacks as payments for steering multimillion dollar government contracts, federal prosecutors said.

Kerry F. Khan, 54, of Alexandria, pleaded before Judge Emmet G. Sullivan in the U.S. District Court in the District to charges of bribery and conspiracy to commit money laundering, officials said in a statement.

“Today, the ringleader of the largest bribery and bid-steering scheme in the history of federal contracting accepted responsibility for his crimes,” U.S. Attorney for the District Ronald Machen said in the statement. “For his shocking abuse of his position of power, Kerry Khan faces more than two decades in prison.”

Kahn’s son, Lee A. Kahn, 31, of Fairfax also pleaded guilty to a charge of conspiracy to commit money laundering. The elder Khan worked for the Army Corps of Engineers from 1994 until he was arrested by federal authorities in October 2011. His position gave him authority to place orders for products and services through federal contracts, and he also certified that work orders were completed, officials said.

The father and son were among four men arrested in October on charges of conspiring to commit bribery and wire fraud. Authorities accused the men of inflating invoices during a four-year period and then collecting tens of millions of dollars for themselves and co-conspirators.

Prosecutors said Kerry Khan signed a statement of offense that said that in or around 2006, he and colleagues agreed to work together to obtain government contracts for corrupt contractors who would reward them with bribes. Authorities said their investigation continues, but they have found eight people to have have been part of this scheme.

Among others, Kerry Khan and Michael A. Alexander, also an Army Corps of Engineers program manager, worked with Harold F. Babb, a contractor, on their plot to use a company called EyakTek as a vehicle for channeling contracts awarded by the Army Corps of Engineers. EyakTek then hired subcontractors that submitted fraudulently inflated estimates or prices for equipment and services, authorities said.

The subcontractors kicked back a significant portion of the excess funds to Kerry Khan and Alexander as bribes for keeping the money flowing their way, officials said.

Prosecutors said Khan and his son admitted to establishing multiple corporations and shell companies to hide the money and purchase real estate, including several houses and condos. Lee Khan managed the portfolio of properties and automobiles purchased using the bribe money, by leasing the homes to tenants or selling vehicles, officials said.

A sentencing date has not been set for either man. Kerry Khan faces a maximum 15-year sentence for the bribery charge and up to 20 years in prison for the conspiracy charge. Babb and Alexander pleaded guilty to federal charges earlier this year.

The men will remain held through the sentencing, officials said.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Former Employee and Contractors of Florida Property Management Company Indicted in Illinois for Alleged Conspiracy to Commit Bribery and Wire Fraud

January 17, 2012

The U.S. Department of Justice (DOJ) on January 17, 2012 released the following:

“WASHINGTON – A Rockford, Ill., grand jury today indicted a former residential sales manager and two former contractors of a Florida property management company in connection with housing repair contracts for the U.S. Department of Veterans Affairs (VA), the Department of Justice announced.

The 10-count indictment filed today in U.S. District Court in Rockford charged Ryan J. Piana, Ronald B. Hurst and Bryant A. Carbonell with conspiring to commit bribery and wire fraud from beginning at least as early as January 2006 continuing until as late as September 2007. Piana, Hurst and Carbonell are also charged with bribery and wire fraud.

Piana is a former residential sales manager at West Palm Beach, Fla.-based Ocwen Loan Servicing LLC, and Hurst and Carbonell are former contractors for Ocwen. According to court documents, Ocwen managed foreclosed properties under contract with the VA, which guaranteed qualifying residential mortgages for veterans. Under the contract between the VA and Ocwen, if a veteran defaulted, Ocwen completed necessary repairs and re-sold the property.

Proceeds from the re-sale of VA-acquired properties directly benefit the VA by reducing the cost of guaranteeing residential mortgages to veterans.

According to the charges, Hurst and Carbonell paid Piana to steer housing repair work to companies affiliated with Hurst and Carbonell. Piana recruited other Ocwen employees into the scheme and paid them on behalf of himself and the other conspirators. The department said in order to execute the scheme, the conspirators sent, or caused to be sent, various transmissions via wire communication.

This is the second case involving properties managed by Ocwen under contract with the VA. On Dec. 3, 2010, Benjamin K. Graves, also a former Ocwen employee, pleaded guilty in U.S. District Court in Orlando, Fla., to wire fraud in connection with the VA contract.

The wire fraud charges carry a maximum penalty of 20 years in prison; the bribery charges carry a maximum penalty of 15 years in prison; and the conspiracy charge carries a maximum penalty of five years in prison. The maximum fine for each charge is $250,000. For wire fraud and conspiracy, the maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. For bribery, the maximum fine may be increased to three times the value of the bribes, if that amount is greater than the statutory maximum fine.

The charges announced today resulted from an ongoing federal investigation of housing repair contracts performed under contract with the VA. The investigation is being conducted by the Antitrust Division’ s Chicago Field Office and the Central Field Office of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, located in Hines, Ill. ”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.