Ex-U.S. Army Corps manager and son plead guilty to bribery scheme

Reuters News
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Posted: May 18, 2012 9:43 PM
Ex-U.S. Army Corps manager and son plead guilty to bribery scheme

By Lily Kuo

WASHINGTON (Reuters) - A former program manager for the U.S. Army Corps of Engineers and his son pleaded guilty on Thursday to participating in a plot involving possibly more than $30 million in bribes and kickbacks to steer a government contract to a favored bidder.

Kerry Khan, 54, whom U.S. prosecutors call the ringleader of the scheme, said he was guilty of federal charges of bribery and conspiracy to commit money laundering.

"I wish to enter a plea of guilty because I am guilty," Khan said, in an orange jumpsuit, hands clasped behind his back as he spoke before Judge Emmet Sullivan in the U.S. District Court for the District of Columbia.

His son, Lee Khan, 31, also pleaded guilty to one count of simple conspiracy for assisting his father for a period of time, according to Jeffrey Weiner, an attorney who represented both men.

Khan's move will likely result in a reduction in his sentence, Weiner said, which according to the statutory guidelines could be up to two decades in prison. The plea, which requires Khan cooperate with the prosecutors, could also help the government as it continues to investigate what it has called one of most brazen corruption schemes in federal contracting history.

Prosecutors have said that beginning in 2006 Kerry Khan, along with another former Army Corps program manager, Michael Alexander, agreed to direct government contracts to companies that paid them bribes, mostly through inflated invoices.

Several men leading contractor and subcontractor companies have already pleaded guilty, and both defense and prosecution believe others will come forward. According to court documents, one company allegedly involved in the scheme had not yet been named.

"We are actively and aggressively pursuing this investigation. It is not over," U.S. Attorney Ronald Machen told a news conference.

The elder Khan could face a maximum of 15 years in prison for the bribery charge and 20 years for the conspiracy charge.

Prosecutors said Khan used the money to buy luxury cars, plane tickets, high-end liquor and flat-screen televisions for his home in Virginia. In one instance, Khan and his son funneled $383,000 to a family member who threatened to blow the whistle on their scheme, prosecutors said.

(Reporting By Lily Kuo; Editing by Cynthia Johnston and Cynthia Osterman)