According to the indictment, EyakTek then submitted invoices that included the inflated amounts to the Corps and Khan caused the Corps to approve the invoices and pay EyakTek. The government says that EyakTek subtracted an amount from the payment as its profit and paid the rest to Company A.

The indictment adds that under the direction of Kerry Khan, Alexander and Babb, the official at Company A caused his company to pay part of the “overhead” amount “directly and indirectly for the benefit of [Kerry] Khan, Lee Khan, Alexander and Babb.”

It also contends that Kerry Khan, Alexander, Babb and others planned a further “scheme” to steer a second contract to Company A “as a vehicle to enable Company A to funnel monies and other things of value” to those three defendants and other people. That contract was named CORES, for Contingency Operations Readiness Engineering and Support. It was to extend for five years and have a maximum value of $780 million.

If convicted, Kerry Khan and Alexander face a maximum prison time of 40 years. Babb faces up to 35 years in prison and Lee Khan, up to 25 years.

U.S. Attorney Machen said, “These charges are only the beginning of a far-reaching, steadfast effort by the U.S. Attorney’s office, the Dept. of Justice and our federal law-enforcement partners to root out and hold accountable shameless government officials and those who entice them—through bribes and other personal benefits—to violate the public’s trust.”

Gene Pawlik, a Corps spokesman, provided a statement that said that the Corps “takes these allegations and the integrity of the contracting process very seriously and we hold all of our employees to the highest standards of conduct.”

The Corps added that it “has been cooperating with the FBI and other federal investigating agencies to uncover this alleged scheme to defraud the U.S. government.”

The Corps also said that it “is working with the U.S. Army Procurement Fraud Office of the Judge Advocate General’s Office to suspend the contractors and individuals involved in this matter. Additionally, we are coordinating with Dept. of the Army officials to ensure appropriate contracting and other safeguards are in place throughout the agency.”

The CEO of EyakTek’s parent, Eyak Corp., Rod Worl, said in an Oct. 5 statement that Babb was “immediately terminated.” Worl added that the company is cooperating with the federal investigation but could not comment on the charges, pending that investigation’s completion.

He said, “Eyak and its shareholders will not tolerate this type of conduct by anyone employed by or associated with an Eyak company.”