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Ex-U.S. Army Corps Official Gets 6 Years for Bribe Scheme

Sept. 13 (Bloomberg) -- A former U.S. Army Corps of Engineers contracting official, Michael A. Alexander, was sentenced to six years in prison for taking bribes and conspiring to launder money as part of a $30 million kickback scheme involving government contractors.

Alexander, 56, who pleaded guilty in February to one count of bribery and one count of money laundering conspiracy was sentenced today by U.S. District Judge Emmet Sullivan in Washington. The former U.S. Army Corps program manager is among 11 people who have pleaded guilty to taking part in what prosecutors call the largest domestic bribery and bid-rigging scheme.

“Michael Alexander flagrantly abused his government position to enrich himself, cheating the taxpayer out of money meant to support our troops,” U.S. Attorney Ronald Machen said in a statement. “After diverting our tax dollars to buy a South Korean coffee shop and to pay prostitutes, he then tried to rig a $1 billion contract.”

Alexander, who lived in Woodbridge, Virginia, was accused along with a colleague, Kerry Khan, of funneling more than $45 million through a contract he was in charge of to a company that kicked back $20 million generated by overbilling. Also charged were Khan’s son and Harold Babb, the director of contracts for Eyak Technology LLC in Dulles, Virginia. All three have pleaded guilty.

Under federal sentencing guidelines, Alexander faced from nine years to more than 11 years in prison. He also agreed to forfeit $1.25 million.

Alexander’s sentence was cut back from the nine years agreed to earlier “in recognition of his immediate post-arrest cooperation,” his lawyer, Christopher Davis, said in an e-mail. “This case has destroyed his career, reputation and life as he knew it. It’s a very sad day for a once very proud and accomplished man.”

The scheme took advantage of a five-year contract with the Army Corps under the so-called TIGER program, according to an indictment unsealed on Oct. 4.

Government agencies, including Homeland Security, NASA and the Coast Guard, use the TIGER contract to acquire information-technology services and physical and infrastructure security.

The scheme was made possible by Kerry Khan’s position as a program director in the Army Corps’s directorate of operations, which administers the TIGER contract, prosecutors said. He had authority to place orders through TIGER that don’t require competitive bidding, according to the indictment.

Prosecutors said those involved in the scheme were planning to expand the bribery operation under a contract called CORES.

The award potential for contracts placed under CORES was almost $1 billion, they said.

The case is U.S. v. Khan, 1:11-cr-00276, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

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

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