The plan was straightforward and effective: A tight team of savvy contractors and government employees inflated invoices by $20 million, approved them and split the proceeds.
And they lived large on the taxpayer’s dollar. Porsches, real estate, flat-screen televisions and Cartier watches: The men bought them all with impunity, prosecutors say.
When it became clear that the contract was running out, a second scheme was hatched, authorities say, but it all ended with the early October arrests of four men, including two government employees, on bribery and money-laundering charges.
Recently unsealed court records, a lengthy indictment, and interviews with key players provide a rare window into an audacious four-year swindle prosecutors have called “one of the most brazen” in federal contracting history. The crime went undetected by regulators until federal authorities came across it while investigating an unrelated fraud.
Those charged in the case – Harold Babb, 60, a contractor; Kerry Khan, 53, and Michael Alexander, 55, Army Corps of Engineers program managers; and Khan’s 30-year-old son, Lee – were arrested Oct. 4. They are in jail pending trial at the request of prosecutors who consider them flight risks. All four have pleaded not guilty.
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