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  • “Ringleader” in Army Corps Scandal Pleads Guilty

    A former program manager for the Army Corps of Engineers, who prosecutors described as the ringleader in the biggest procurement bribery case in history, has pleaded guilty to bribery and conspiracy to commit money laundering.

    Kerry A. Khan acknowledged receiving $12 million in kickbacks and said he was owed an additional $14 million. He is the eighth person to plead guilty in the case.

    According to Khan’s statement in U.S. District Court in Washington, he and another Corps program manager, Michael Alexander, began soliciting bribes from contractors in 2006. They took payoffs to steer work to at least four 8(a) companies and another firm that has not been identified. Alexander and executives of the four companies have pleaded guilty.

    Prosecutors said the conspirators netted more than $30 million. The scheme continued until four of them were arrested last October.

    “The ringleader of the largest bribery and bid-steering scheme in the history of federal contracting accepted responsibility for his crimes,” said Ronald Machen, the U.S. attorney in Washington. “For his shocking abuse of his position of power, Kerry Khan faces more than two decades in prison. The homes, cars, and jewelry he financed with bribes and kickbacks have now been returned to their rightful owner – the American taxpayer.”

    Khan’s son Lee A. Khan also pleaded guilty. Court documents said he managed properties for his father and arranged a payoff to a brother, who was threatening to blow the whistle on the scam.

    “Today is a day of reckoning for Kerry Khan, said Robert Craig, special agent in charge of the Defense Criminal Investigative Service when Khan entered his plea on May 17. “His plea today is a chilling example of a corrupt government employee coming to the realization that engaging in criminal activity within the federal procurement process will be discovered and there is a severe price to be paid for selfishly violating the public’s trust,”


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