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Wednesday, July 24, 2024

South Korean Conglomerate Employees Charged with Defrauding US Government in Army Base Construction

Two employees of SK Engineering & Construction Co., Ltd. (SK), a large multinational corporation based in the Republic of Korea (South Korea), were charged on November 8 with participating in a scheme to defraud the United States by submitting fraudulent subcontracts to conceal bribes and kickbacks paid to an American public official, in relation to U.S. Army construction contracts in South Korea.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney D. Michael Dunavant of the Western District of Tennessee, Special Agent in Charge Ray Park of the U.S. Army Criminal Investigation Command (Army-CID) Pacific Fraud Field Office, Special Agent in Charge Stan Newell of the Defense Criminal Investigative Service (DCIS), and Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Field Office made the announcement.

Hyeong-won Lee, 58, and Dong-Guel Lee, 48, both citizens of South Korea and employees of SK Engineering & Construction Co., Ltd. (SK), were charged with one count of conspiracy to defraud the United States and to commit wire fraud and obstruction of justice, and one count of major fraud against the United States.  Hyeong-won Lee was also charged with two counts of wire fraud and one count of money laundering conspiracy, and Dong-Guel Lee was charged with one count of witness tampering in relation to a wide-ranging bribery and fraud scheme from 2008 to 2017.  The defendants are not related.

According to the indictment, the defendants, acting on behalf of SK, submitted fraudulent subcontracts to the U.S. Army as part of two construction contracts at Camp Humphreys, South Korea, worth hundreds of millions of dollars.  The indictment alleges that the defendants and their co-conspirators used these fraudulent subcontracts to launder millions of dollars in kickbacks for a U.S. public official who had steered two Camp Humphreys construction contracts to SK.

The indictment also alleges that the defendants obstructed investigations into the scheme.  According to the indictment, Hyeong-won Lee ordered SK employees to destroy documents related to the fraudulent subcontract, and SK employees burned boxes of documents in order to prevent their use by investigators.  The indictment also alleges that Dong-Guel Lee, acting on SK’s behalf, impeded federal investigations by dissuading witnesses from testifying about their knowledge of the scheme.

Army-CID, DCIS, and the FBI are investigating the case.  Assistant Chief Justin Weitz of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Tony Arvin of the Western District of Tennessee are prosecuting the case.

See more at The Justice Department

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