Former Bank Employee Indicted for Fraud, Bribery, Money Laundering

Actions Led to $12 Million Loss

A 44-count indictment was filed against Paulette Roberts related to a scheme that resulted in the loss of $12 million while she was employed at Fifth Third Bank, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, and Steven D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation, Cleveland Field Office.

Roberts, 54, resides in Sylvania, Ohio, according to court documents.

Roberts, a loan officer and vice president at Fifth Third Bank in Toledo, falsified documents and submitted them to bank officials to obtain credit approval for large commercial loans which would have otherwise been declined, according to the indictment.

In conjunction with these loans, Roberts solicited and accepted a gratuity payment from the borrowers. She then attempted to conceal these funds by creating a fake consulting business under which she invoiced borrowers for services not performed and accepted the gratuities, according to the indictment.

Roberts ultimately spent the concealed funds to purchase two vehicles, gold coins, and other assets. As a result of defaults upon these loans, the Fifth Third Bank of Toledo, Ohio, suffered a loss of approximately $12 million, according to the indictment.

The indictment charges Roberts with one count of conspiracy to commit financial institution fraud, one count of financial institution fraud, one count of bank bribery, and 41 counts of money laundering.

“Financial crimes come in all shapes and sizes, from self-dealing to Ponzi schemes,” Dettelbach said. “In this case the defendant took advantage of her employer’s trust in an effort to enrich herself.”

“Unfortunately, for some, personal greed trumps work ethic and the law as evidenced in this case,” Anthony said. “Paulette Roberts used her banking knowledge to falsify documents and mislead the financial institution that employed her by attempting to line her own pockets. The FBI will continue to aggressively investigate financial crimes that negatively impact our federally insured banking institutions.”

If convicted, the defendant’s sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any; the defendant’s role in the offense; and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and in most cases it will be less than the maximum.

The investigating agency in this case is the Federal Bureau of Investigation, Toledo, Ohio. The case is being handled by Assistant United States Attorneys Joseph R. Wilson and Gene Crawford.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

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Virginia Businessman Pleads Guilty to Bribery and Other Charges in Contracting Scheme Involving U.S. Army

Defendant Admits Providing Money to Army Official, Paying for Trips, Luxury Vehicles, and Other Things of Value

WASHINGTON—Oh Sung Kwon, 47, a Northern Virginia businessman, pled guilty today to federal charges stemming from a bribery scheme in which he paid thousands of dollars to an Army official in return for government contracts, as well as a separate scheme involving fraudulent real estate sales and refinances.

Kwon, also known as Thomas Kwon, of Vienna, Virginia, pled guilty in the U.S. District Court for the District of Columbia to one count each of bribery, conspiracy to commit bank fraud and willful failure to file a tax return. He appeared before the Honorable Magistrate Judge John M. Facciola. He faces a statutory maximum of 21 years in prison, along with potential fines, restitution and a judgment of forfeiture. No sentencing date was set.

Kwon was the co-founder and chief executive officer of Avenciatech Inc., a government contractor based in Annandale, Virginia. He is among 12 people who have pled guilty to federal charges for their roles in the largest domestic bribery and bid-rigging scheme in the history of federal contracting. The investigation is continuing.

The plea was announced by U.S. Attorney Ronald C. Machen Jr.; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Rick A. Raven, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS); and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).

According to a statement of offense, signed by the government and the defendant, Kwon learned of a contract-steering scheme from two business contacts: Alex N. Cho, who was then the chief technology officer for Nova Datacom LLC and a second Nova Datacom employee. This scheme involved contracts and subcontracts awarded through the U.S. Army Corps of Engineers in return for hundreds of thousands of dollars in payments to Kerry F. Khan. At the time, Khan was a program manager at the Army Corps of Engineers. Kwon’s role in the scheme involving the Army Corps of Engineers involved Kwon arranging for Cho and another Nova Datacom employee to exchange checks for approximately $700,000 in cash, which was paid to Khan in exchange for government contracts. Kwon later attempted to obstruct the resulting criminal investigation by destroying evidence. Kwon also disclosed to law enforcement authorities the efforts by Cho and another Nova Datacom employee to obstruct the criminal investigation, including Cho’s attempts while wearing a recording device to prevent Kwon from making incriminating statements.

Kwon learned of a second, similar scheme through another business contact: Nick Park, a former Nova Datacom employee who was then the president of Unisource Enterprise Inc. Kwon learned through Park that he had obtained a subcontract for his company by agreeing to pay bribes to a person identified in court documents as “Public Official C.” This official, based at the time in Seoul, South Korea, was an assistant project manager for the U.S. Army who had responsibilities for a major contract.

In or about February 2009, Kwon established Avenciatech for the purpose of obtaining government contracts. The following month, Kwon traveled to South Korea to meet Public Official C. In exchange for an undisclosed ownership interest in Avenciatech, Public Official C agreed to use his official position to steer subcontracts from the Army to Avenciatech. Plans later called for Public Official C to have a 40 percent ownership interest in the company.

The court documents provide details about two contracts. One, in September 2009, was in the amount of $366,844. However, army change orders later increased the value of this subcontract to $1,913,059. The second contract, obtained in February 2011, was in the amount of $551,093. Change orders later increased its value to $1,413,513.

From February 2009 until October 2011, Kwon made a series of bribe payments to Public Official C. They included cash payments; payments for hotel stays for Public Official C and family members, including a trip to the Atlantis resort in the Bahamas; payments to finance the purchase of a 2010 Lexus automobile; and payments for other things of value. Kwon also assisted Public Official C in financing the purchase of a home in Fairfax Station, Virginia, where Public Official C resided following his reassignment in 2010 to a position at Fort Belvoir.

Kwon also pled guilty to charges in a separate scheme involving bank fraud. In addition to running Avenciatech, Kwon was the operations manager for Onyx Financial Services, a mortgage broker based in Annandale. He admitted involvement in at least six fraudulent real estate sales and refinances in northern Virginia, with loan amounts of about $1.8 million.

Finally, Kwon pled guilty to the willful failure to file a tax return. This charge involved his 2010 income tax return.

Cho pled guilty in September 2011 to one count of conspiracy to commit bribery, money laundering, and wire fraud and to defraud the United States and one count of bribery. Khan pled guilty in May 2012 to one count each of bribery and conspiracy to commit money laundering. Park pled guilty in June 2012 to two counts of bribery.

The others who have pled guilty include Michael A. Alexander, a former program manager with the Army Corps of Engineers; Harold F. Babb, the former director of contracts at Eyak Technology LLC (EyakTek), an Alaska Native-owned small business; Theodoros Hallas, who also worked for Nova Datacom; Robert L. McKinney, the president of Alpha Technology Group Inc.; James Edward Miller, the owner of Big Surf Construction Management LLC; Larry G. Corbett, the owner of Core Technology LLC and Enterprise Technical Solutions Inc.; Lee A. Khan, the son of Kerry Khan; and Nazim Khan, the brother of Kerry Khan.

Alexander was sentenced earlier this month to a six-year prison term and ordered to pay $1.25 million in restitution and a $1.25 million forfeiture money judgment. The other defendants are awaiting sentencing.

In announcing the plea, U.S. Attorney Machen, Assistant Director in Charge McJunkin, Inspector General Gustafson, Special Agent in Charge Craig, Special Agent in Charge Raven, and Director Robey thanked those who investigated the case from the FBI’s Washington Field Office; the Office of the Inspector General for the Small Business Administration; the Department of Defense’s Defense Criminal Investigative Service; the Defense Contract Audit Agency; the Washington Field Office of the Internal Revenue Service-Criminal Investigation; and the Army Criminal Investigation Command. They also expressed thanks to the U.S. Marshals Service for its assistance on the forfeiture matter.

They also praised the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Michael K. Atkinson and Bryan Seeley of the Fraud and Public Corruption Section and Assistant U.S. Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section. Finally, they expressed thanks for assistance provided by former Special Assistant U.S. Attorney Christopher Dana; Forensic Accountant Maria Boodoo; Paralegal Specialists Tasha Harris, Lenisse Edloe, Shanna Hays, Taryn McLaughlin, Sarah Reis, Christopher Samson, and Nicole Wattelet; and Legal Assistants Krishawn Graham and Jessica McCormick.

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Former Jefferson Parish President Pleads Guilty

NEW ORLEANS—Aaron F. Broussard, age 63, a resident of Jefferson Parish and former two-term president of Jefferson Parish, entered a guilty plea to conspiracy to commit bribery, wire fraud, and theft concerning programs receiving federal funds, as well as an additional count of theft concerning programs receiving federal funds, announced U.S. Attorney Jim Letten, FBI Special Agent in Charge Michael Anderson, and IRS-Criminal Investigative Division Special Agent in Charge James Lee. Broussard faces up to 15 years’ imprisonment as a result of today’s guilty plea.

Today’s guilty plea is the fifth conviction stemming from the government’s investigation into corruption in Jefferson Parish under the tenure of former Parish President Broussard. Previously, Thomas Wilkinson, the former parish attorney for Jefferson Parish; Timothy Whitmer, the former chief administrative officer for Jefferson Parish; William Mack, the owner of First Communications Company, a parish vendor; and Karen Parker, the ex-wife of Broussard, have all entered guilty pleas to various federal felonies.

Today, Broussard admitted in open court that he conspired with Whitmer, Wilkinson, Parker, and another Jefferson Parish official to steal taxpayer funds when he and others created a sinecure paralegal supervisor position for Broussard’s ex-wife. Documents filed in federal court conclusively establish that Broussard knowingly and illegally diverted taxpayer funds to his ex-wife in the form of her salary for over six years. Further, Broussard admitted that his wife did not even possess the most basic credentials or requisite experience to hold the position of paralegal supervisor. Moreover, Broussard, knowing of the illegal arrangement concerning his ex-wife’s sham employment, repeatedly sought to conceal the illegal nature of his her employment with Jefferson Parish through multiple material misrepresentations on bank documents, federal income tax returns, and on his State of Louisiana Annual Ethics Disclosure Reports. Broussard had his wife transferred to the ID Management Office at the East Bank Regional Library in an effort to hide the fact that she was not working for the Parish Attorney’s Office as a paralegal supervisor and was not performing any work as a paralegal. Broussard also admitted to illegally giving pay raises to Parish Attorney Tom Wilkinson.

Broussard admitted that his wife’s salary benefited him financially as well. In total, Broussard and his wife improperly diverted over $323,308 in salary over the period of six years, which was over $129,000 more than the individual who held the position of ID/security system coordinator.

In addition, Broussard admitted to receiving numerous bribes totalling over $60,000 while parish president. Specifically, Broussard sought and accepted bribes and payoffs from William Mack in exchange for Broussard’s assistance and intervention on Mack’s behalf. Broussard, while parish president, intervened for Mack in order to assist Mack in receiving parish contracts for telecommunications services and equipment, and Broussard attempted to conceal the relationship with Mack by creating a sham recusal letter. Previously, Mack plead guilty to paying bribes to Broussard for undertaking official acts to benefit Mack’s company.

Broussard faces a maximum penalty of not more than five years in prison as to count one, and 10 years as to count 27 of the second superseding indictment, followed by up to three years of supervised release, and a $250,000 fine. In summary, Broussard could be sentenced up to 15 years in prison and fined $500,000. Broussard also faces substantial forfeiture related to his crimes as a result of today’s convictions.

Sentencing is set for February 25, 2013, before Senior U.S. District Judge Hayden Head.

Speaking to today’s conviction, United States Attorney Jim Letten stated, “Today’s conviction of former Jefferson Parish President Aaron Broussard marks the fifth in a series of individuals convicted on federal felony charges arising out of an investigation which revealed the abuse of power in parish government designed to benefit public officials and not the taxpayers. The abuse of power and position by public officials has plagued this region and even the state for many years. Our tolerance of public corruption is zero. We will hold accountable under the law everyone who bears the responsibility of serving to the citizens in our democracy. We will not tolerate the fraud, waste, and abuses which have cost our people so dearly in terms of services, infrastructure, safety, and quality of life.

“My special thanks go out to our team of prosecutors and support staff from the United States Attorney’s Office, as well as the men and women of the Federal Bureau of Investigation, along with the IRS Criminal Investigation Division and the New Orleans Metropolitan Crime Commission.”

Michael Anderson, Special Agent in Charge of the Federal Bureau of Investigation New Orleans Field Office, added, “I commend our public corruption investigative team and the USAO for their tireless efforts in untangling these complex and intertwined schemes of self dealing that betrayed the public’s trust.”

IRS Special Agent in Charge, James Lee, stated, “We are pleased that Aaron Broussard has accepted responsibility and entered a guilty plea for abusing his position as Jefferson Parish president. IRS-Criminal Investigation will continue to work with our federal partners to end political corruption in New Orleans.”

The case was investigated by agents from the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation Division and were assisted by the Metropolitan Crime Commission.

The case is being prosecuted by Assistant U.S. Attorneys Brian Klebba, Matt Chester, Daniel Friel, and Mimi Nguyen.

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