Two execs of Korean construction firm charged with defrauding US out of millions
- The U.S. Department of Justice announced charges against two employees of a South Korean construction company for allegedly defrauding the U.S. government out of millions of dollars while performing work under two construction contracts at Camp Humphreys (also called U.S. Army Garrison-Humphreys) in South Korea.
- Prosecutors allege that SK Engineering & Construction Co. employees Hyeong-won Lee and Dong-Guel Lee of SK Engineering & Construction submitted and laundered money through fake subcontracts to the U.S. Army in an attempt to cover up kickbacks they were paying an unnamed U.S. public official in exchange for helping SK win the projects, worth hundreds of millions of dollars. The two are also accused of attempting to obstruct the investigation into the alleged fraud by ordering SK employees to burn documents related to the fake subcontracts and by trying to convince witnesses not to testify in the matter.
- U.S. authorities are still investigating the incident, but, thus far, each employee has been charged with one count of conspiracy to defraud the U.S. and to commit wire fraud and obstruction of justice, plus one count of major fraud against the U.S. Individually, the U.S. charged Hyeong-won Lee with two counts of wire fraud and one count of money laundering conspiracy. Authorities also charged Dong-Guel Lee with one count of witness tampering in relation to alleged bribery and fraud from 2008 to 2017.
Construction fraud happens on civilian and military public projects, and when the individuals who perpetrate these acts are left unchecked, their actions can undermine confidence in the bidding process and result in inflated costs for projects and taxpayers.
As in the SK case, public officials are sometimes involved in the fraud. In August, the U.S. Attorney's Office for the Northern District of Ohio charged Rufus Taylor, the former chief of the Cleveland Demolition Bureau, with requesting and taking bribes from contractors in exchange for giving them inside information that helped them win city work and for adding them to the city's bid list. The amounts contractors allegedly gave Taylor from 2013 through 2016 were as little as $300 and as much as $8,000.
Earlier this year, a New York court sentenced former New York City Metropolitan Transit Authority construction project administrator Talib Lokhandwala to 46 months in prison and ordered him to pay a $20,000 fine after he pleaded guilty to bribery charges. Lokhandwala accepted more than $150,000 in contractor bribes in exchange for promises of MTA work.
- U.S. Department of Justice Two Employees of South Korean Conglomerate Charged with Defrauding U.S. Government in Army Base Construction
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