- Associated Press - Tuesday, December 16, 2014

ANCHORAGE, Alaska (AP) - An Alaska Native village corporation will pay the federal government $2.5 million and give up claims to payments from a contract signed by subsidiaries to settle a fraud case.

The U.S. Department of Justice announced Monday that Eyak Alaska Native Village Corp. agreed to the terms.

One of the subsidiaries, EyakTek, held a $1 billion contract with the Army Corps of Engineers from 2005 to 2011, the Alaska Dispatch News reported (https://bit.ly/1zse8Di ).

From 2007 to 2011, according to prosecutors, Harold Babb, a director of contracts for the company, accepted kickbacks from subcontractors. Babb received a prison sentence of more than seven years.

“EyakTek and ESL (Eyak Services LLC) allegedly submitted invoices to the Army Corps that included charges for work that was never performed by the subcontractors and lacked internal controls to detect the improper charges,” the Justice Department said in an announcement.

“This civil settlement sends a message to contractors who try to cheat in the competition for government funds,” said Ronald C. Machen, U.S. attorney of the District of Columbia, in the announcement.

Eyak’s CEO said the company wanted to resolve all of the claims.

“Pursuing any avenue other than a global settlement would have potentially damaged our relationship with an important business partner and may have led to a lengthy, costly court battle,” Rod Worl said in a news release. “We are glad this chapter is over and are ready to turn the page.”

Twenty people have been convicted in the case.


Information from: Alaska Dispatch News, https://www.adn.com

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