Plea deal for 1 in massive contracting fraud case

January 25, 2012 - 10:35 PM

WASHINGTON (AP) — A former Army Corps of Engineers employee has agreed to plead guilty for his role in what prosecutors say may be one of the largest and most brazen frauds involving U.S. government contracts, court papers show.

Michael A. Alexander plans to plead guilty to charges of bribery and conspiracy to launder money, his attorney wrote in court papers, requesting a hearing as early as Monday.

Alexander, another Army Corps of Engineers employee and two other men were indicted in October on charges of participating in a $20 million bribery and kickback scheme involving the awarding of government contracts. Prosecutors said that Alexander, a program director, and Kerry F. Khan, an Army Corps program manager, received kickbacks in exchange for directing government contracts to a subcontractor specializing in software encryption devices and other information assurance technology.

The kickbacks paid for luxuries including properties, Rolex and Cartier watches, sports cars and hotel accommodations, prosecutors said.

The scheme, which authorities said spanned roughly four years, involved phony and inflated invoices for government contracts and millions of dollars in kickbacks that were funneled through a network of shell companies in the United States and around the world.

Also indicted were Kerry Khan's son, Lee, and Harold F. Babb, the former director of contracts for Eyak Technology LLC. Eyak Technology is a subsidiary of an Alaska native corporation with Virginia operations. It was the prime contractor for a five-year, $1 billion contract administered by the Army Corps of Engineers.

The two Khans and Babb have pleaded not guilty. Two officials with an EyakTek subcontractor — Nova Datacom — have already pleaded guilty.

It was not immediately clear whether Alexander planned to cooperate against his co-defendants, though his lawyer wrote that his client has agreed to plead guilty, "among other things," as part of a deal with the government.

Alexander's lawyer, Christopher Davis, did not immediately return a call seeking comment Wednesday. A spokesman for the U.S. attorney's office in the District of Columbia, which is prosecuting the case, declined to comment.