Contractor faces charges on taxes, lying about past

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The chief operating officer of a security contractor hired to guard FBI, Air Force and other federal buildings had a long rap sheet before being charged yesterday with lying about his background and tax evasion, authorities said.

Richard Hudec, who also served as chief financial officer for USProtect Corp., had four felony fraud convictions on his record and served time in prison as recently as 2001, according to federal court filings. But the convictions went undetected for years and Mr. Hudec helped broker federal contracts worth an estimated $150 million for the company in dozens of states, court records show.

U.S. Attorney for Maryland Rod J. Rosenstein yesterday listed a host of felony charges against Mr. Hudec; the company's previous owner, Michael Holiday; and former General Services Administration (GSA) employee Dessie Ruth Nelson in what he called "the largest corruption case ever prosecuted in Maryland."

Mr. Rosenstein said government contracting "must be based on which contractor provides the best service to the public at the lowest price, not on which contractor offers the highest bribe to the employee at the highest price."

Mr. Hudec, 44, was charged with tax evasion and concealing material information about his past to federal authorities. He is accused of failing to report more than $500,000 in income from his company on his 2002 tax return. Each charge carries up to five years in prison.

Holiday, 50, pleaded guilty yesterday to tax evasion and bribery. He admitted bribing a GSA official to rig the bidding on federal government contracts in favor of Holiday International Security, which later changed its name to USProtect.

Miss Nelson, 65, a former GSA contracting official, was charged yesterday with taking bribes from Holiday, including a Caribbean cruise, a shopping bag with $35,000 and an envelope with $10,000. A GSA spokesman yesterday said she voluntarily resigned last year.

However, the GSA had no comment as to questions about how Mr. Hudec"s background apparently went undetected.

Authorities say Mr. Hudec was released from federal prison in February 2001 on a bank-fraud conviction in New Jersey.

In 2003, Holiday sold the company, which changed its name to USProtect. Ownership was transferred to Mr. Hudec"s spouse, who is not mentioned by name in any court records.

Mr. Hudec held numerous positions, including chairman, chief financial officer and chief operating officer, court records show.

Charging documents also state that Mr. Hudec prepared the company"s contracting proposals and lied when certifying that none of the company"s top officials had been convicted of fraud.

But court documents show he was convicted of fraud four times during the 1990s, including a bank-fraud case in New Jersey that resulted in a 28-month prison sentence.

Mr. Hudec could not be reached for comment yesterday. His name is not listed in phone records, and a person who answered the phone at USProtect yesterday said he has not worked at the company "in years." Company officials did not return phone messages.

Charging documents released yesterday also state that Hudec "caused the company to reap more than $150 million from contracts procured through proposals that concealed the prior fraud judgments against defendant Mr. Hudec."