Former Military Official Pleads Guilty to Telecom Bribery

A former official with the U.S. Army and Air Force Exchange Service (AAFES) has pleaded guilty to charges related to a conspiracy to commit bribery involving a multimillion-dollar telecommunications contract in South Korea, the U.S. Department of Justice said.

Henry Lee Holloway, 42, of Hamilton, Georgia, also pleaded guilty to a charge of not reporting on his income-tax returns the bribes he accepted, the DOJ said. Holloway pleaded guilty Tuesday in U.S. District Court for the Middle District of Georgia.

Holloway, who worked as an AAFES general store manager in South Korea from 2003 to 2007, conspired with officials from Samsung Rental to maintain the company's US$206 million contract with AAFES to provide telecom services to U.S. armed forces installations in South Korea, the DOJ said.

Between May 2003 and April 2007, Holloway received $70,000 worth of stock offerings, entertainment, travel expenses, cash and other items of value from Samsung Rental, and he took action to protect the company despite believing Samsung Rental was underperforming in its contract, the DOJ said. Before the payments began, Holloway attempted to terminate the contract between AAFES and Samsung Rental, the DOJ said.

Holloway pleaded guilty to two counts, one count of conspiracy and one count of filing a false tax return. Holloway failed to report his bribe income between 2003 and 2005, the DOJ said.

Holloway faces up to five years in prison on the conspiracy count, as well as a $250,000 fine. He faces up to three years in prison for filing a false tax return, as well as a $100,000 fine. A sentencing date has not yet been set by the court.

Gi-Hwan Jeong, CEO of Samsung Rental, was indicted on Dec. 17 in the Northern District of Texas on two counts of bribery for his alleged role in the scheme. Jeong's trial is scheduled to begin June 1.

To comment on this article and other PCWorld content, visit our Facebook page or our Twitter feed.
Shop Tech Products at Amazon