Fired Eyak exec pleads guilty to fraud
Harold Babb, a ringleader in a corrupt government contracting scheme, pleaded guilty in federal court March 13 to fraud charges, leading federal officials to claim success in exposing one of the largest contracting fraud schemes in government history.
According to a statement of offense signed by Babb, he admitted participating in a scheme that involved the U.S. Army Corps of Engineers and two contracts: the Technology for Infrastructure, Geospatial, and Environmental Requirements (TIGER) contract and the Contingency Operations Readiness Engineering & Support (CORES) contract.
The bribery charge stems from Babb’s payments and promises to Kerry Khan, a former program manager at the Army Corps, in return for Khan’s approval on contracts and subcontracts awarded through the Army Corps of Engineers to Eyak Technology, an IT firm, and Big Surf Construction Management. All told, Babb pleaded guilty to providing, offering and promising more than $7 million, directly and indirectly, to Khan. Babb was director of contracts for Eyak and was fired by the company when the allegations came to light.
The kickback charge stems from Babb’s dealings with Alex Cho, the former chief technology officer of Nova Datacom LLC, an information assurance and security service provider. Babb admitted to soliciting, accepting and attempting to accept more than $1 million in kickbacks from Cho and Nova Datacom in return for giving the company preferential treatment on subcontracts.
Babb was arrested in October but was one of the last to plead guilty.
“It took me a while to come to terms (with), but I am guilty,” Babb, who has been in custody since his arrest, told a federal judge before entering his plea, the Associated Press reported.
U.S. Attorney Ronald Machen Jr. said Babb faces significant prison time and will forfeit to cash, properties, and a Porsche that he bought with the money.
“Unethical contractors should understand that their attempts to fleece the taxpayer will not only carry harsh financial penalties but also real prison time as well,” Machen said.
Officials emphasized this case as an example of how they will go after unethical contractors.
“As this case illustrates, Army [Criminal Investigation Command (CID)] Major Procurement Fraud Unit will aggressively pursue anyone who attempts to defraud the U.S. government,” said Major General David Quantock, the commanding general of the U.S. Army Criminal Investigation Command. “Army CID, along with our federal law enforcement partners, are committed to ensuring that these conspirators are held accountable for their illegal activities.”
Matthew Weigelt is a former FCW senior writer who covered acquisition and procurement.