Friday, September 5, 2008

Civilian Contractor Charged in Superseding Indictment for Allegedly Paying Bribes While at Camp Arifjan in Kuwait

A federal grand jury in the District of Columbia returned a superseding indictment today against a civilian contractor for allegedly paying bribes to Army contracting officials at Camp Arifjan, an Army base in Kuwait, and for committing honest services fraud in connection with the same conduct, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division announced.

The superseding indictment returned today charges Terry Hall, 41, of Rex, Ga., with one count of conspiracy to commit bribery, two substantive bribery counts and two honest services wire fraud counts. Hall was originally indicted on Nov. 20, 2007, and charged with one count of bribery of a U.S. Army contracting official at Camp Arifjan.

Hall operated several companies that had contracts with the U.S. military in Kuwait, including Freedom Consulting and Catering Co. (FCC) and Total Government Allegiance (TGA). According to the superseding indictment, FCC and TGA received approximately $17 million from contracts to deliver bottled water and to erect security fencing for the Department of Defense (DoD) in Kuwait and Iraq.

The superseding indictment alleges that Hall bribed two Army majors who served as Army contracting officials at Camp Arifjan between 2004 and 2006. The first contracting official (CO-1) arranged for a blanket purchase agreement (BPA) for bottled water to be awarded to FCC, and thereafter CO-1 arranged for calls under that BPA, as a result of which DoD paid FCC approximately $6.8 million. CO-1 also arranged for DoD to award a contract to FCC to construct a security fence at Camp Arifjan, for which DoD paid FCC approximately $750,000. According to the superseding indictment, in exchange for these and other official acts CO-1 performed, he and his wife received more than $1 million in money and jewelry from Hall.

The superseding indictment also charges that bank accounts were established in the Cayman Islands, the United States and elsewhere in the name of CO-1’s wife and in the name of an entity that she incorporated, through which CO-1 and his wife received bribe money from Hall and others.

In addition, the superseding indictment charges that a second contracting official, James Momon, arranged for calls to TGA under the bottled water BPA described above, as a result of which DoD paid Hall approximately $6.4 million. In exchange for these and other official acts, Momon is alleged to have received at least $200,000 from Hall.

The superseding indictment also alleges that Hall arranged for companies and bank accounts to be established in the Cayman Islands, the Philippines, the United Arab Emirates and elsewhere in the names of third parties and entities, for the purpose of paying bribes to CO-1, James Momon and others. Hall also allegedly prepared and executed purported consulting agreements for the purpose of creating the appearance that certain U.S. Army officials and others had legitimately earned the payments, which were in fact alleged to be bribes.

“Corruption uncovered throughout the course of this investigation is particularly unsettling in that it involves collusion between Department of Defense contractors entrusted with providing crucial supplies and services to soldiers, sailors, airmen and Marines serving so valiantly overseas, and military officers who swore an oath to bear true faith and allegiance toward our nation and the principles it was founded on,” said Sharon Woods, Director, Defense Criminal Investigative Service. "The Defense Criminal Investigative Service remains committed to protecting America's war fighters from individuals who place their own selfish interests above the welfare of our country's brave protectors,” Woods added.

“This case is indicative of the intense commitment we have to rooting out corruption and criminality associated with contracting while supporting the U.S. Army and our war-fighters,” said Commanding Brigadier General Rodney Johnson of the U.S. Army Criminal Investigation Command. “It equally demonstrates the intense commitment and partnership we have as major contributors within the National Procurement Fraud Task Force.”

“These selfish acts of greed pose a real threat to our men and women in uniform,” said Julie L. Myers, Department of Homeland Security Assistant Secretary for U.S. Immigration and Customs Enforcement (ICE). “Ensuring the integrity of our military support systems is key to protecting national security at home and abroad.”

"In concert with our partner law enforcement agencies, SIGIR continues to advance efforts to investigate allegations of corruption in Iraq and to support the Department of Justice's prosecution of those who wrongfully have taken advantage of the U.S. reconstruction program for illegal personal gain. The prosecution of Terry Hall is the latest success in those collective efforts,” said Stuart W. Bowen, Special Inspector General for Iraq Reconstruction (SIGIR).

If convicted on the conspiracy charge, Hall faces up to five years in prison. Hall faces 15 years in prison if convicted on the bribery count and 20 years in prison if convicted on the wire fraud count. Hall also faces fines and a term of supervised release, if convicted. The superseding indictment also seeks the forfeiture of any property or money involved in the alleged offenses.

An indictment is merely an accusation and the defendant is presumed innocent until and unless proven guilty at trial beyond a reasonable doubt.

The case is being prosecuted by trial attorneys Peter C. Sprung and Deborah Mayer of the Criminal Division’s Public Integrity Section, headed by Section Chief William Welch. These cases are being investigated by Army Criminal Investigation Division and Defense Criminal Investigation Service, the FBI, ICE, the Justice Department’s Office of the Inspector General, SIGIR and the Internal Revenue Service Criminal Investigation. The investigations are continuing.

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