Bribery and Bid-Rigging

October 15, 2015

Houston-based military contractor Kellogg Brown & Root, Inc. (KBR) was ordered to pay roughly $108,000 for violating the Anti-Kickback Act by accepting gifts and gratuities, including expensive dinners, golf outings and event tickets, from various sub-contractors while KBR was providing logistic services to the United States Army Operations Support Command contract known as LOGCAP III.  LOGCAP III was awarded to KBR for the provision of logistical support to the Army in Iraq and Afghanistan.  FBI

September 29, 2015

One current and three former US Army soldiers were sentenced for their involvement in a bribery scheme in Afghanistan that resulted in the theft of fuel valued at more than $10 million.  Jeffery B. Edmondson was the senior enlisted member of the unit who supervised all his co-conspirators and was sentenced to eight years in prison.  Christopher Ciampa was sentenced to 10 years in prison.  Enmanual Lugo was sentenced to four years in prison.  And Geoffrey Montague was a senior enlisted member of the unit who reported to Edmondson and was sentenced to five years in prison.  In connection with their guilty pleas, the defendants admitted to submitting fake Transportation Movement Requests (TMRs) for thousands of gallons of fuel that were neither necessary nor used by military units.  The defendants admitted that, in return for cash bribe payments, they awarded all the TMRs to the same Afghan trucking company, which used the fake TMRs to download fuel from depots on Kandahar Air Field and then sold the fuel on the black market.  DOJ

September 11, 2015

PAE Government Services Inc. and RM Asia (HK) Limited agreed to pay $1.45 million to resolve allegations they engaged in a bid-rigging scheme that resulted in false claims for payment under a US Army contract for services in Afghanistan.  In 2007, the Army awarded PAE a contract to provide vehicle maintenance capabilities and training services for the Afghanistan National Army at multiple sites across Afghanistan.  PAE partnered with RM Asia to supply and warehouse vehicle parts.  According to the government, former managers of PAE and RM Asia funneled subcontracts paid for by the government to companies owned by the former managers and their relatives by using confidential bid information to ensure that their companies would beat out other, honest competitors.  DOJ

July 10, 2015

Army National Guard Sergeant First Class Jason Rappoccio was sentenced to 42 months in prison and to forfeit $31,328 for accepting a $30,000 bribe in exchange for steering a $3.6 million contract to Timothy Bebus, a retired sergeant major of the Minnesota Army National Guard, and his consulting company Mil-Team Consulting.  DOJ

July 8, 2015

George H. Lee, president and CEO of American Logistics Services, a Kuwaiti company providing supplies to the U.S. military during the Iraq War, was sentenced to 54 months in prison for paying a $15,000 bribe to former Army National Guard Lieutenant Markus E. McClain in exchange for the award of a contract.  DOJ

June 19, 2015

Karen L. Finley, the former chief executive officer of a red light camera vendor, pleaded guilty to participating in an eight-year bribery and fraud scheme.  As part of her plea agreement, Finley admitted that, between 2005 and 2013, she participated in a scheme in which the company made campaign contributions to elected public officials in the cities of Columbus and Cincinnati through a consultant retained by the company.  DOJ

April 28, 2015

Japan-based Yamada Manufacturing Co. Ltd. agreed to plead guilty and pay a $2.5 million criminal fine for its role in a conspiracy to fix prices and rig bids for manual (non-electric or non-hydraulic-powered) steering columns installed in cars sold in the US and elsewhere.  DOJ

March 31, 2015

Germany-based Robert Bosch GmbH, the world’s largest independent auto parts supplier, agreed to plead guilty and pay a $57.8 million criminal fine for its role in a conspiracy to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automobile and internal combustion engine manufacturers in the US and elsewhere.  DOJ

March 23, 2015

Former principal vice president of Bechtel Corporation Asem Elgawhary was sentenced to 42 months in prison for accepting $5.2 million in kickbacks to manipulate the competitive bidding process for state-run power contracts in Egypt.  One of the power companies who supplied the bribes, Alstom S.A., pleaded guilty in December to violations of the Foreign Corrupt Practices Act.  DOJ

February 20, 2015

George H. Lee, president and CEO of Kuwaiti-based American Logistics Services, pleaded guilty to paying a $15,000 bribe to an Army National Guard officer in exchange for the award of a contract to provide buses to the US Army in Iraq.  DOJ