Even before he competed for his first government job, the key witness in the largest bribery case in federal contracting history said an associate warned him that he’d have to “pay to play,” according to a recent jailhouse letter.
Alex Cho said he began work as a contractor because he thought doing business with the U.S. government would be an honest way to make a living — a notion he quickly abandoned.
“In planning to get into this field, I actually thought I would be getting away from dishonesty,” Cho told U.S. District Judge Emmet G. Sullivan in a lengthy letter from the D.C. Jail — his first public remarks on the historic $30 million corruption scam that has resulted in 20 guilty pleas.
The ringleader, Army Corps program manager Kerry Khan, extracted millions of dollars in kickbacks from corrupt contractors for years. But Cho said Khan also made other “absurd demands.”
“As I told agents, he asked me on numerous occasions to drive 45 minutes, including at night, from my home in Ashburn to his [home in] Alexandria … to unclog his toilet, fix his A/C and even to replace his light bulbs.”
Khan is serving a 19-year prison sentence. Sentencing papers filed on Cho’s behalf refer to him as “the key cooperator” in the “most successful bribery case” that federal prosecutors in Washington have ever handled, though the case has received scant attention in Congress.
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Cho wore an undercover wire for months in hopes of getting a favorable sentencing recommendation. But after a falling out with prosecutors, the U.S. attorney’s office is seeking eight years in prison for Cho. He was supposed to have been sentenced this week, but the hearing was postponed.
Cho’s previous lawyer argued in sentencing papers that prosecutors had promised Cho that they’d intercede on his behalf with the U.S. Immigration and Customs Enforcement on deportation proceedings.
But prosecutors countered in court papers that things changed after Cho tipped off an associate during the investigation that he was wearing an undercover recording device. In his letter, Cho seemed to acknowledge his slim chances of remaining in the United States.
“I wish I had been a perfect cooperator,” he wrote. “I think that the FBI would have sponsored me for citizenship, but now that is gone.”
Still, he added, he didn’t regret cooperating in the investigation.
“Working with the government was the right thing to do even though it didn’t make several government officials who planned for very cushy retirements happy at all,” he wrote.
Investigators had little idea about the bribery scheme until they interviewed Cho on an unrelated case.
The scheme, headed by Khan along with another Army Corps official, Michael Alexander, was all but impossible to detect because bribes were built into contracts as inflated overhead, then corrupt companies paid out the money to Khan in kickbacks.
In his letter, Cho said he got his start in government contracting in 2002 after he lost his job selling used computer equipment. Within nine years of founding the now-defunct company, Nova Datacom LLC, the business posted about $20 million in contract revenues.
But the costs of paying millions in bribes caused Nova Datacom to lose money on some contracts, he added.
“The contracts came in, but so did the demands for more bribes,” Cho recounted. “When I tried to stop paying bribes, Kerry Khan told me it was too late for me to get out.”
Meanwhile, Khan, representing himself, has filed a motion from federal prison challenging his sentence. He based the pleading on the grounds that his lawyer was ineffective and that prosecutors didn’t give him the same sort of sentencing break that he says other defendants received.
Khan also disputed the characterization that he was the ringleader, though prosecutors have consistently referred to him as such in press releases and court documents. One prosecutor even referred to the entire conspiracy as Khan Inc., with Khan as the mastermind.
But from prison, Khan said he believes that he received harsher treatment because he is black and has a “Muslim-sounding name.”
“While unfortunate, such motivations have become all too common post-9/11,” Khan wrote from the Fort Dix Federal Correctional Institution. Prosecutors have until next month to respond to the motion.
Also pending sentencing, Cho’s sister, Min Jung Cho, pleaded guilty last year. The company she and her brother ran, Nova Datacom, also pleaded guilty, but its assets have been sold off to another company since the investigation.
While most of the corruption involved kickbacks at the Army Corps of Engineers, the investigation also uncovered a related scheme involving Army contracts in Korea.
Last month the former chief executive of a Virginia-based company that holds defense and intelligence agency contracts pleaded guilty to paying bribes to a former Army contacting official, In Seon Lim, who was sentenced in October to four years in prison.
The company, Intelligent Decisions Inc., also agreed to pay a $300,000 fine to resolve charges that it paid for golf outings, meals and a Lexus to Lim. In a statement, the company has said it has new leadership, the violations happened five years ago, and officials cooperated in the investigation.