South Korean Engineering Company Pleads Guilty to Defrauding U.S. Army, Agrees to Pay $68.4 Million
SK Engineering & Construction Co. Ltd. (SK), one of the largest engineering firms in the Republic of Korea,
pleaded guilty today to one count of wire fraud, in connection with a fraudulent scheme to obtain U.S. Army contracts through payments to a U.S. Department of Defense contracting official and the submission of false claims to the U.S. government.
SK entered the plea, pursuant to a plea agreement with the United States, before U.S. District Judge Thomas L. Parker in the Western District of Tennessee,
who sentenced SK to pay $60,578,847.08 in criminal fines, the largest fine ever imposed against a criminal defendant in the Western District of Tennessee, pay $2,601,883.86 in restitution to the U.S. Army,
and serve three years of probation, during which time SK agreed not to pursue U.S. federal government contracts.
The U.S. Army previously suspended SK by order dated Nov. 17, 2017, from future contracting throughout the executive branch of the U.S. Government.
As part of SK’s plea agreement,
SK agreed to, among other things, cooperate fully with the United States in all matters relating to the conduct covered by the plea agreement and other conduct under investigation by the United States, to report violations of U.S. federal law, and to continue to implement a compliance and ethics program designed to effectively detect deter violations of U.S. federal law throughout its operations.
Separately, SK has entered into a False Claims Act settlement with the United States, under which it is obligated to pay $5,200,000 in civil penalties to the United States, which the department credited against SK’s criminal fine.
SK paid millions of dollars to secure contracts with the Army and submitted false claims to conceal those illicit payments,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
Today’s guilty plea and substantial criminal penalty sends a clear message: companies who voluntarily self-disclose misconduct, cooperate, and remediate will receive appropriate credit for their efforts.
But companies like SK – which withheld and destroyed documents, attempted to persuade a witness not to cooperate, and failed to discipline any responsible employees – will pay a price.
OPA | Department of Justice
SK E&C slapped with $68.4m fine in US
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