Army Corps Contract Kickback Probe Yields 6th Guilty Plea

The owner of a Virginia-based construction management company pleaded guilty to charges of conspiracy to commit money laundering in a probe of contracts awarded by the Army Corps of Engineers.

James Edward Miller, 64, today became the sixth person to plead guilty in what prosecutors called a scheme to steer contracts from the Army Corps worth about $1 billion. It involved more than $20 million in bribes and kickbacks, the Justice Department said today in a statement. Miller entered his plea before U.S. District Judge Emmet G. Sullivan in Washington.

Miller was a close friend of Harold Babb, head of contracts at Dulles, Virginia-based Eyak Technology LLC, who suggested Miller’s company could obtain business as a subcontractor of Eyak, a contract manager for the agency, the government said.

Babb, 60, was already allegedly involved in a conspiracy with a program manager for the Army Corps to funnel business for kickbacks, prosecutors said. He pleaded guilty in March to bribery and unlawful kickbacks.

Babb was one of four people initially charged in a case that prosecutors called one of the most brazen frauds in federal contracting history. A U.S. Army Corps contracting official, Michael A. Alexander, in February admitted taking bribes and conspiring to launder money.

Alexander was accused along with a colleague, Kerry Khan, who pleaded not guilty, of funneling more than $45 million through a contract he was in charge of though Eyak to a subcontractor, which kicked back $20 million generated by overbilling.

The case is U.S. v. Miller, 1:12-cr-00063, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Fred Strasser in Washington at fstrasser@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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