4 Nabbed in Government Bribery Investigation

Prosecutors: Men Built $20 Million Falsely Into Invoices

Thursday, Oct 13, 2011  |  Updated 1:21 PM EDT
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Four people, including two U.S. Army Corps of Engineers employees, are accused of pocketing more than $20 million in bribes and kickbacks. Federal authorities are calling it

Jane Watrel

Four people, including two U.S. Army Corps of Engineers employees, are accused of pocketing more than $20 million in bribes and kickbacks. Federal authorities are calling it "one of the most brazen bribery schemes in U.S. history."

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Four Virginia men, including two employees of the U.S. Army Corps of Engineers, have been arrested in a bribery and kickback scheme that prosecutors say involved more than $20 million in bribes and kickbacks, as well as the planned steering of a $780 million government contract to a favored contractor.

According to the indictment, Kerry Khan, 53, of Alexandria and Michael Alexander, 55, of Woodbridge, both employees of the USACE, helped funnel more than $45 million in payments to a favored company through a federal government contract they oversaw. They allegedly planned to steer hundreds of millions more to the business.

Prosecutors claim that the conspirators built $20 million in fraudulent expenses into the company's invoices and the proceeds went to all four defendants.

The defendants allegedly spent their largesse on multiple properties, luxury cars, airline tickets, watches, and, in the case of the Khans, a $383,000 payment to a family member who had threatened to alert authorities about the scheme.

"This indictment alleges one of the most brazen corruption schemes in the history of federal contracting," said U.S. Attorney Ronald C. Machen in a statement.

Also arrested were Kerry Khan's son, 30-year-old Lee Khan of Fairfax, and Harold Babb, 60, of Sterling. Babb is the director of contracts for Eyak Technology, a Dulles-based contractor.

All four defendants were indicted on one count of conspiracy to commit bribery and wire fraud and aiding and abetting and causing an illegal act to be done, as well as one count of conspiracy to commit money laundering.

Kerry Khan and Alexander also were indicted on one count of receipt of a bribe by a public official and Babb was indicted on one count of unlawful kickbacks.

If convicted of all charges, Kerry Khan and Alexander face a maximum of 40 years in prison. Babb faces up to 35 years, while Lee Khan could get as many as 25 years.

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