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Bid-rigging mastermind gets 19 years

Jul. 11, 2013 - 06:00AM   |  
By JIM McELHATTON   |   Comments
The Alexandria, Va., home of Kerry Khan, a former Army Corps of Engineers contracting official who was sentenced Thursday in the biggest bid-rigging scheme in the government's history.
The Alexandria, Va., home of Kerry Khan, a former Army Corps of Engineers contracting official who was sentenced Thursday in the biggest bid-rigging scheme in the government's history. (Staff)

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Kerry Khan, the mastermind behind the largest bid-rigging scheme in federal contracting history, received a sentence of 19 years and seven months in prison Thursday for bilking the Army Corps of Engineers out of more than $30 million.

Prosecutors recommended around 15 years in prison, but U.S. District Court Judge Emmet Sullivan called that too lenient, saying he was troubled by a secretly recorded conversation during the investigation in which Khan discussed plans to meet up with a 15-year-old prostitute.

Khan, 55, a program manager at the Army Corps, ran what one prosecutor called Khan Inc., an off-the-books family-run holding company funded with tens of millions of dollars in illicit contract proceeds that controlled dozens of corporate entities, bank accounts around the world and properties, including Khan’s opulent Alexandria, Va., home.

“His greed was of epic proportions,” said Assistant U.S. Attorney Michael Atkinson.

Atkinson said Khan deserved to go to prison longer than the 10 years sought by his attorney to send a message to other government contractors and public officials who might be tempted to rig contracts and take bribes.

“The business of our town is government, and with government comes contracts, lots of government contracts,” he said.

Defense attorney Jeffrey Zimmerman said his client didn’t deny his wrongdoing and cooperated with government investigators from the start, which, in turn, convinced others charged in the case to plead guilty rather than go to trial.

In brief remarks before his sentencing, Khan apologized, saying only that he was going through a dark period in his life. But he was at a loss when asked by the judge how, after working his way up through the Army Corps, he ended up facing so much time in prison.

“Hopefully, one day I’ll be able to put it together,” Khan said.

In a sentencing memo, prosecutors detailed how in addition to Khan’s central role in a historic Army Corps bribery scheme, investigators secretly monitored text exchanges in 2011 as the program manager discussed with an associate in the Philippines plans to “engage in prostitution with a girl represented to him to be 15 years old.”

Sullivan called the exchange “shocking, vicious and cruel,” but he said he was giving Khan credit for cooperating after he was caught.

Prosecutors said Khan’s plans to go to the Philippines were disrupted by law enforcement.

“You made history for all the wrong reasons,” the judge told Khan before sending him to federal prison for the better part of the next two decades.

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