US Reaches $68 Million Settlement of Korea Base Construction Fraud
The U.S. Justice Dept. has reached agreement with a major Korean construction firm to settle a construction fraud case, charging bribes of military officials and false claims on a large U.S. Army base project in South Korea. In a plea deal, SK Engineering & Construction, Seoul, will pay $68.4 million in criminal and civil fines.
DOJ says SK obtained a large land development contract at the Camp Humphreys base near Seoul in 2008 “worth hundreds of millions” after paying $2.6 million in bribes to an Army Corps of Engineers official. Payments went through a fake Korean contractor SK set up to submit the false documents to the Army to cover up the fraud. Construction of the 3,500-acre base, one of the military’s largest anywhere, is set for completion by 2021 with costs estimated over $11 billion.
SK also admitted that employees obstructed federal criminal probes of the scheme, including burning evidence and witness tampering. The firm agreed not to pursue U.S. government contracts for three years after being suspended in 2017 from executive branch work.
SK ranks at No. 54 on ENR’s Top 250 Global Contractors list, reporting $6.76 billion in 2018 construction revenue. The company agreed to cooperate fully with plea deal terms and implement a compliance and ethics program, said DOJ. Company officials did not respond further to an ENR query by press time.
Two SK employees were indicted in 2018 by a federal grand jury in Tennessee for conspiracy, wire fraud, money laundering, conspiracy and other charges for their alleged roles in the scheme.
DOJ says they have not been tried and remain “fugitives of justice.”