OSAN AIR BASE, South Korea — A former AAFES official has pleaded guilty in Georgia to taking bribes to shield a telecom firm from losing its lucrative contract to sell Internet service to U.S. military customers in South Korea, the Justice Department said.
Appearing Tuesday in U.S. District Court in Columbus, H. Lee Holloway admitted guilt to one count of conspiracy to commit bribery and one count of filing a false tax return. He appeared before U.S. District Judge Clay D. Land. A sentencing date has not been set.
Holloway signed a plea agreement with federal prosecutors in the case, according to court documents, but details have not been made public.
Holloway failed to report to the Internal Revenue Service bribe income for tax years 2003, 2004 and 2005, the Justice Department said.
Holloway, 42, of Hamilton, Ga., was Army and Air Force Exchange Service general manager at Osan Air Base in South Korea from June 2000 to August 2005. He was then AAFES general manager at Fort Benning, Ga., until he resigned when federal agents were investigating him in the case involving South Korea’s SSRT, also known as Samsung Rental Company Ltd.
Holloway admitted to wrongdoing in the period from May 2003 to April 2005, the Justice Department said. At sentencing, Holloway will face up to five years and a $250,000 fine on the conspiracy conviction and up to three years in prison and a $100,000 fine for filing a false tax return, the Justice Department said.
He also stands to lose any assets gained from the criminal activity, department officials said.
At Osan, Holloway was to some a high-profile, flamboyant figure known as a snappy dresser and a devoted family man. Some Air Force officers called him "Lee ‘Hollywood’ Holloway" — in part as a tribute to his flair for promoting big AAFES projects.
He allegedly received no less than $70,000 in bribes from SSRT chief executive Jeong Gi-hwan in exchange for helping the complaint-ridden company hang on to its $206 million AAFES contract, according to court documents.
Jeong has pleaded not guilty to federal bribery charges stemming from the SSRT-AAFES case. His trial is to begin June 1 in Dallas federal court.
Bribes to Holloway were in the form of cash, stock offerings, entertainment, travel and other items of value, according to court documents. Prostitutes, dining and drinking were also among the expenditures.
Holloway used some of the bribe money to make improvements to his Hamilton home, and to buy personal property, the documents said.
SSRT expected to gain $20 million in profits by bribing Holloway, according to the documents.
Through what federal prosecutors contend was a corrupt bidding process, SSRT beat out several competitors in November 2001 and was awarded the AAFES contract for 10 years. While Holloway was a general manager at Osan, it was extended to 2019.
But SSRT eventually became the object of widespread complaints of excessive prices and poor service.
In addition, according to court documents, SSRT was unable to provide promised services to customers and failed to pay its required fees to AAFES.
At first, Holloway tried to terminate SSRT’s AAFES contract but did an about-face once the bribes began, according to court documents.
"After the payments from Jeong to Holloway began, and as the result of those payments, Holloway used official acts and influence to support and expand that contractual relationship," according to the documents.
SSRT was forced to give up its contract in January 2007 in the face of the complaints, South Korean prosecution of Jeong on bribery charges, and publicity about the case.
