A South Korean citizen and a South Korean firm have been indicted for bid-rigging and conspiring to defraud the United States through maintenance work on U.S. military bases in South Korea. The superseding indictment was handed down by a federal grand jury in the U.S. District Court for the Western District of Texas.
According to a press release from the U.S. Department of Justice, Hye Yeon "Rachel" Jo, CEO of DESCA Co. Ltd., a company engaged in repair and maintenance subcontract work on U.S. military bases in South Korea, allegedly conspired with DESCA to rig bids and fix prices starting from late 2018, defrauding the U.S. Defense Department of millions of dollars.
The same press release from the Justice Department also reveals that Hyuk Jin Kwon and Hyun Ki Shin were indicted in March 2022 for conspiring with Jo and DESCA.
Under the eight-count indictment, as per the Justice Department's announcement, Jo, DESCA, Kwon, and Shin are charged with one count of conspiracy to restrain trade - a violation of the Sherman Act; one count of conspiracy to commit wire fraud; and six counts of wire fraud. For violating the Sherman Act, they could face up to 10 years in prison and a $1 million fine; while DESCA could be fined up to $100 million. Wire fraud carries a potential penalty of up to 20 years in prison and a $250,000 fine.
In response to these allegations, Director Daniel Glad of the Justice Department’s Procurement Collusion Strike Force (PCSF) said: "These alleged crimes targeted United States military installations overseas, where we make significant investments to protect our strategic interests." He further stated that "The Antitrust Division and our PCSF partners around the globe will continue to investigate and pursue charges for illegal conduct that targets U.S. military spending, wherever it occurs."
