Accepted Over $100,000 in Bribes
GREENBELT, Md., Jan. 10 /PRNewswire-USNewswire/ -- Dessie Ruth Nelson,
age 65, of Oakland, California, a former longtime employee of General
Services Administration (GSA), pleaded guilty today to accepting over
$100,000 in bribes and evading taxes on the bribe payments she accepted in
return for her assistance in awarding three federal contracts worth over
$130 million, announced United States Attorney for the District of Maryland
Rod J. Rosenstein.
"Federal investigators have followed the evidence in this case across
the nation, from Maryland to California, to ensure that anyone involved in
this corruption scheme will be held accountable," said U.S. Attorney Rod J.
Rosenstein. "This case demonstrates the harm that can be caused by a
corrupt contracting officer."
According to the plea agreements of Nelson and Michael Holiday, Nelson
worked in San Francisco, and was responsible for contracting on behalf of
GSA with private companies to provide security to GSA managed buildings.
Former Montgomery County police officer Michael Holiday was the chief
executive officer and owner of Holiday International Security, Inc. (HIS),
based in Silver Spring, Maryland, which provided federal facilities with
physical security, primarily through armed guards. In May of 2003, HIS
changed its name to USProtect Corporation.
Between 2000 and 2003, Holiday and other contractors provided Nelson
with cash, vacations and other benefits worth over $100,000, in exchange
for her assistance in awarding three multi-million dollar contracts to HIS.
One contract involved GSA-managed federal buildings in San Diego and three
other counties in southern California. GSA solicited bids for a contract to
provide security services to these federal facilities in November 1999.
Although HIS's bid was almost $10 million higher than the lowest bid
received by GSA, Nelson awarded the contract to HIS in May 2000. From 2000
through 2004, GSA paid HIS and USProtect more than $54 million pursuant to
this contract.
In February 2001, GSA solicited bids to provide security to federal
facilities in San Francisco and seven other counties in northern
California. Although HIS again did not submit the lowest bid price, Nelson
awarded the contract to HIS in June 2001 at a cost of more than $30.5
million. From 2001 through the present, GSA paid HIS and USProtect more
than $30 million pursuant to this contract.
In January 2002, HIS submitted a proposal for a contract to provide
security to SSA-operated facilities in Baltimore, Maryland. Nelson sent SSA
responses she prepared to a questionnaire regarding HIS's performance of
its California contracts. Although HIS had experienced problems, Nelson
provided all favorable ratings for HIS. Based in part on this
recommendation, SSA awarded the contract to HIS. From 2002 through the
present, SSA paid HIS and USProtect more than $50 million pursuant to this
contract.
Nelson admits that in return for her assistance in obtaining the above
contracts, Holiday provided her with, among other benefits, a shopping bag
containing $35,000 in cash and an envelope containing $10,000 in cash.
Holiday also arranged for and paid $7,000 for Nelson's passage on a
Caribbean cruise.
Nelson admits that she failed to report the cash and other illicit
payments from Holiday and other contractors as income on her federal
individual income tax returns for 2000 through 2003. Nelson concealed the
income by arranging to make cash deposits into her bank accounts in amounts
that did not exceed $10,000, in order to evade federal reporting
requirements regarding cash transactions.
Nelson faces a maximum sentence of 15 years in prison on the bribery
charge and five years in prison for tax evasion. U.S. District Judge
Deborah K. Chasanow scheduled her sentencing for June 16, 2008 at 10:00
a.m.
Michael B. Holiday, age 50, of Silver Spring, Maryland, also pleaded
guilty to bribery and tax evasion in connection with this scheme. Holiday
is scheduled to be sentenced on January 23, 2008 at 2:00 p.m.
In a related case, Richard S. Hudec, age 44, of Naples, Florida, who
was a former chief operating officer of USProtect, pleaded guilty on
November 30, 2007 and faces a maximum sentence of five years in prison for
concealing material information from federal contracting officials --
including four prior felony convictions -- in connection with federal
contracts worth over $150 million that were awarded to USProtect. He also
pleaded guilty to evading taxes on income he obtained as a result of the
government awarded contracts and faces five years in prison and a $250,000
fine for the tax evasion. U.S. District Judge Deborah K. Chasanow scheduled
Hudec's sentencing for February 25, 2008 at 3:00 p.m.
In October 2006, the Department of Justice launched the National
Procurement Fraud Task Force designed to promote the early detection,
identification, prevention and prosecution of procurement fraud associated
with the increase in government contracting activity for national security
and other government programs. The Procurement Fraud Task Force -- chaired
by Assistant Attorney General Alice S. Fisher for the Criminal Division --
includes the United States Attorneys' Offices, the FBI, the U.S. Inspectors
General community, and a number of other federal law enforcement agencies.
This case, as well as other cases brought by members of the Task Force,
demonstrate the Department of Justice's commitment to helping ensure the
integrity of the government procurement process.
United States Attorney Rod J. Rosenstein praised the Federal Bureau of
Investigation; the General Services Administration -- Office of Inspector
General; the Social Security Administration -- Office of Inspector General;
the Department of Homeland Security -- Office of Inspector General; the
Internal Revenue Service -- Criminal Investigation; Treasury Inspector
General for Tax Administration; and the Defense Criminal Investigative
Service for their investigative work. Mr. Rosenstein thanked Assistant U.S.
Attorneys Michael Pauze and Jonathan Biran, who are prosecuting the case.
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SOURCE U.S. Department of Justice
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Related links:
http://www.USDOJ.gov
CONTACT:
Vickie E. Leduc of the U.S. Department of
Justice, +1-410-209-4885, fax, +1-410-962-3091
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