PYEONGTAEK, South Korea — A U.S. grand jury indicted South Korean businessman Jeong Gi-hwan on Wednesday on charges he bribed two AAFES officials so his company could do a lucrative Internet and phone business with U.S. troops and families in South Korea.
A grand jury in U.S. District Court for the Northern District of Texas charged Jeong with two counts of bribery.
Jeong, 44, is chief executive of Samsung Rental Corp. Ltd., also known as SSRT. From October 2001 to January 2007, the company held a $206 million Army and Air Force Exchange Service contract to provide home Internet, telephone and cellphone services to military community customers in South Korea.
The alleged bribes totaled about $195,000 and included money spent on prostitutes, dining, drinking and travel, according to the indictment and other prosecution documents filed earlier in the case.
In recent court filings, prosecutors have contended that Jeong bribed Clifton W. Choy to help win the contract through an allegedly corrupt bidding process. And they accused Jeong of bribing H. Lee Holloway to help SSRT keep the contract in the face of persistent complaints of alleged price gouging and poor service.
Wednesday’s indictment names Henry Lee Holloway, a former AAFES general manager at Osan Air Base.
The indictment identifies the other official only as "Person A," who was AAFES services program manager for the Pacific region, and whose duties included involvement in managing AAFES’ telecommunications service contracts in South Korea.
Choy, who served in that position for two years, was fired in February 2007 after 36 years of employment for allegedly receiving "gifts, gratuities and bribes" related to the SSRT contract. Choy died in August of heart failure at age 56 at a time when he faced possible federal prosecution in the case.
According to Wednesday’s indictment, Jeong allegedly "directly and through others" provided about $114,000 in money, entertainment and travel expenses to Person A to gain his favorable influence toward SSRT contracting with AAFES. Jeong allegedly paid Holloway about $81,000 in money, entertainment and travel expenses in exchange for his favorable influence, the indictment says.
Federal agents arrested Jeong on bribery charges Nov. 19 at AAFES headquarters in Dallas. He remains in custody in Texas pending further action.
Prosecution documents say Holloway confessed to taking bribes. Holloway resigned in January 2007 after 17 years with AAFES "to avoid separation," the documents say.
Jeong was convicted in a South Korean court in January of interfering with international trade for bribing AAFES officials. He and SSRT were fined what totaled about $31,000. It is now being appealed to the South Korean Supreme Court, according to a defense document filed in the federal case.
SSRT was forced to give up the contract in January 2007. The contract was taken over by LG Dacom, which currently holds it.
Jeong’s Dallas lawyer has said the charges are being contested.
