South Korean National Pleads Guilty to Scheme to Defraud U.S. Department of Defense

A South Korean national pleaded guilty today to participating in a scheme to defraud the U.S. Department of Defense.

According to court documents filed in the U.S. District Court in Columbus, Ohio, Hyun Dong Jo of the Republic of Korea was the designated manager under a Defense Logistics Agency contract to provide hazardous waste removal, testing, disposal, and related services to U.S. military installations in South Korea. In that position, Jo participated in a scheme to falsify laboratory reports submitted under this hazardous waste contract.  

From at least as early as February 2015 until at least June 2018, Jo submitted hundreds of falsified or materially altered laboratory reports, misrepresenting to U.S. military officials that laboratory testing and analysis had been performed on samples taken from U.S. military installations located in South Korea, when, in many cases, no such testing was performed. As part of the scheme, Jo emailed the forged laboratory reports and invoices seeking payment for those reports to the Department of Defense, causing the Defense Financial Accounting Service to wire more than $280,000 in payments.

“This charge reflects the Antitrust Division’s commitment to protecting taxpayer dollars spent overseas,” said Acting Assistant Attorney General Richard Powers of the Department of Justice Antitrust Division. “Individuals who cheat the U.S. military in the performance of contracts will be held accountable. We hope this guilty plea will serve as a deterrent for other contractors who contemplate obtaining illicit gains through engaging in fraud while providing services for the U.S. military domestically or abroad.”

“The defendant forged lab results and falsely reported them to the Department of Defense,” said Acting U.S. Attorney Vipal J. Patel for the Southern District of Ohio. “Not only is this unsafe for the U.S. Forces installations in Korea where hazardous waste was not actually tested, but it also defrauded the Department of Defense out of $280,000. This office takes Jo’s conduct seriously and will continue to hold accountable anyone who attempts to defraud the government in this way.”

“Taking advantage of the DoD contracting system for one’s own enrichment is a clear violation of the law,” said Director Frank Robey of the U.S. Criminal Investigation Command’s Major Procurement Fraud Unit. “Our agents and our law enforcement partners will steadfastly pursue this type of scheme and all fraud that erodes the rule of law and the trust between the DoD and the contracting community.”   

“This case should serve as a cautionary tale for those who seek enrichment by way of deceit,” said Special Agent-in-Charge Stanley A. Newell of the Transnational Operations Field Office for the Defense Criminal Investigative Service (DCIS). “Anyone who attempts to defraud the Department of Defense with bogus and doctored invoices will be held to account. The special agents of the DCIS along with our investigative partners from the U.S. Army’s Criminal Investigative Command, are dedicated to protecting the integrity of U.S. military procurements around the globe; and ensuring that American taxpayers get what they pay for.” 

Jo pleaded guilty to one count of wire fraud and faces a maximum sentence of 20 years in prison and a maximum fine of $250,000. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if that amount is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Defense Criminal Investigative Service, U.S. Army Criminal Investigation Command, and Defense Logistics Agency’s Office of Inspector General are investigating the case.

The Justice Department’s Antitrust Division Washington Criminal II Section is prosecuting the case. Special thanks are extended to Deputy Criminal Chief Brenda Shoemaker of the U.S. Attorney’s Office for the Southern District of Ohio.  

Anyone with information in connection with this investigation or other schemes affecting the U.S. military’s procurement process should call the Antitrust Division’s Washington Criminal II Section at 202-598-4000 or the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or http://www.justice.gov/atr/contact/newcase.html.