DALLAS (CN) – South Korean businessman Gi-Hwan Jeong pleaded guilty to bribing employees of the Army and Air Force Exchange Service to win and keep a $206 million telecommunications contract for his company, Samsung Rental Ltd., federal prosecutors said.
Operated by the U.S. Department of Defense, the AAFES provides retail merchandise and services to armed forces servicemembers and their families at U.S. military installations around the world. It operates more than 3,100 facilities worldwide, including retail stores, fast food joints and movie theatres.
According to court documents, from 2001 to 2006 Jeong conspired with two AAFES officials, Henry Lee Holloway and Clifton Choy, among others, to commit bribery and honest services wire fraud. Jeong agreed to pay cash, travel and entertainment expenses, among other things. Jeong admitted be bribed Choi with $80,000 from 2001 to 2005.
“Prior to AAFES’ award of the telecommunications contract to SSRT in 2001, Choy used his official position to gain access to confidential bid proposal information that competing bidders had submitted to AAFES and passed information to Jeong, who used it to ensure that SSRT submitted the winning bid,” the Department of Justice said in a statement.
“Shortly after AAFES awarded the contract to SSRT, Jeong admitted paying $20,000 in cash to Choy, who passed away in 2008.”
Jeong also admitted paying $70,000 in bribes to Holloway from May 2003 to April 2005 to curry favor with Holloway, who, as an AAFES general store manager for South Korea, was in a position to terminate the AAFES’ contract with SSRT after allegations of problems with the company. After Jeong began paying Holloway, according to court documents, Holloway used official acts and influence to support the contract between SSRT and AAFES.
Jeong pleaded guilty to one count of conspiracy, two counts of honest services wire fraud, and two counts of bribery. He faces up to 5 years in prison and a $250,000 fine on the conspiracy count, up to 20 years in prison and a $250,000 fine for each honest services wire fraud count, up to 15 years in prison for each of the bribery counts, and a fine of $250,000 or three times the value of the things of value Jeong provided, whichever is greater.
Sentencing is scheduled for Sept. 16.