Korean businessman pleads guilty to telecom bribery

By , IDG News Service |  Legal, telecom

A South Korean businessman has pleaded guilty to his role in a bribery conspiracy involving a US$206 million telecommunications contract to serve members of the U.S. military, the U.S. Department of Justice said.

Gi-Hwan Jeong pleaded guilty Thursday in U.S. District Court for the Northern District of Texas to a five-count indictment charging him with one count of conspiracy, two counts of honest services wire fraud and two counts of bribery. From 2001 to 2005, Jeong gave about $90,000 worth of cash, entertainment and other things to two officials with the Army and Air Force Exchange Service (AAFES), which sells products and services to members of the U.S. military and their families, the DOJ said.

Jeong's bribes were aimed convincing the AAFES officials to maintain a $206 million contract with his company, Samsung Rental, the DOJ said. Jeong gave bribes to Clifton Choy, an AAFES services program manager for the Pacific region, and in exchange, Choy gained access to confidential bid information from competing bidders and passed the information to Jeong, the DOJ said.

Jeong paid $20,000 to Choy, who died last year, shortly before AAFES awarded the contract to Samsung Rental, the DOJ said.

From May 2003 to April 2005, Jeong also provided approximately $70,000 in cash, entertainment, travel expenses, stock options and other things of value to Henry Lee Holloway, an AAFES general store manager in South Korea. Holloway had considered terminating the Samsung Rental contract following allegations that the company did not fulfill its obligations. After the bribes, Holloway used his influence to maintain the Samsung Rental contract, the DOJ said.

Jeong's sentencing is scheduled for Sept. 16. He faces up to five years in prison on the conspiracy count, as well as a $250,000 fine, and he faces up to 20 years in prison, plus a $250,000 fine, for each honest services wire fraud count. The maximum sentence for each of the bribery counts is 15 years in prison and a $250,000 fine.

On April 21, Holloway, of Hamilton, Georgia, pleaded guilty in U.S. District Court for the Middle District of Georgia for his role in the conspiracy and for not reporting the bribes he admitted he accepted on his income tax returns. Holloway's sentencing date is not yet scheduled.

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