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Friday, November 21, 2008
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Korean Businessman Detained in Bribery Conspiracy Involving $206 Million Contract

WASHINGTON - A South Korean businessman was ordered detained today for his alleged role in a bribery conspiracy for a $206 million telecommunications contract involving employees of the Army Air Force Exchange Service (AAFES), Acting Assistant Attorney General Matthew Friedrich of the Criminal Division announced.

Gi-Hwan Jeong, 44, was arrested in Dallas on Nov. 19, 2008, on a criminal complaint charging him with one count of conspiracy to defraud the United States, to commit wire fraud and to commit bribery, and one count of bribery. In ordering Jeong’s detention, Magistrate Judge Paul D. Stickney of the Northern District of Texas found probable cause to support the charges and that Jeong was a flight risk.

According to the affidavit in support of the complaint, AAFES provides goods and services worth billions of dollars to U.S. Armed Forces service members and their families around the world, often referred to as "PX services." The affidavit alleges that Jeong paid bribes to AAFES employees, who are considered U.S. government employees, to assist his company, SSRT, in connection with a $206 million contract to provide telecommunication services to AAFES customers. The affidavit further alleges that an AAFES employee attempted to terminate the contract with SSRT for poor performance, but supported the contract after receiving payments from Jeong.

This case is being prosecuted by Senior Trial Attorney Richard C. Pilger and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, headed by William M. Welch II, Chief. The case was investigated by the Air Force Office of Special Investigations, the FBI and the Internal Revenue Service, Criminal Investigation.

A criminal complaint is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.