Former Bechtel Executive Sentenced To Over Three Years In Prison And Ordered To Forfeit $5.2 Million In Connection With Kickback Scheme
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Asem Elgawhary, 73, of Potomac, Maryland today to 42 months in prison for accepting $5.2 million in kickbacks to manipulate the competitive bidding process for state-run power contracts in Egypt. Judge Chasanow also ordered Elgawhary to forfeit $5.2 million.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Division and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington D.C. Field Office.
Elgawhary, the former principal vice president of Bechtel Corporation and general manager of a joint venture operated by Bechtel and an Egyptian utility company pleaded guilty on Dec. 4, 2014, to mail fraud, conspiracy to commit money laundering, and obstruction and interference with the administration of the tax laws.
From 1996 to 2011, Elgawhary was assigned by Bechtel—a U.S. corporation engaged in engineering, construction and project management—to be the general manager at Power Generation Engineering and Services Company (PGESCo), a joint venture between Bechtel and Egypt’s state-owned and state-controlled electricity company, known as EEHC. PGESCo assisted EEHC in identifying possible subcontractors, soliciting bids and awarding contracts to perform power projects for EEHC. According to his plea agreement, Elgawhary admitted to accepting a total of $5.2 million from three power companies, which they paid to secure a competitive and unfair advantage in the bidding process. One of the power companies, Alstom S.A., together with a Swiss subsidiary, pleaded guilty on Dec. 22, 2014, to violations of the Foreign Corrupt Practices Act (FCPA) in connection with a scheme to pay bribes to foreign officials, including Elgawhary, in various countries.
As Elgawhary admitted in his plea agreement, he attempted to conceal the kickback scheme by routing the payments through various off-shore bank accounts, including Swiss bank accounts, under his control. Elgawhary also sent various documents and “Representation Letters” to Bechtel executives and members of the PGESCo Board of Directors, falsely certifying that he had no knowledge or suspicion of any fraud at PGESCo, and that there were no possible violations of law or regulations that should have been considered for disclosure in PGESCo’s financial statements. Elgawhary also admitted that, in a further attempt to conceal the scheme, he made misrepresentations to counsel for Bechtel when he was interviewed in April 2011.
Elgawhary further admitted to obstructing and interfering with tax laws by failing to report any of the kickback payments as income for the tax years 2008 through 2011 and providing false information about foreign bank accounts.
Elgawhary, a dual U.S. and Egyptian citizen, was arrested on a criminal complaint when he flew into the United States on Nov. 26, 2013, and was indicted on Feb. 10, 2014.
United States Attorney Rod J. Rosenstein thanked the FBI and IRS-CI for their work in the investigation. U.S. Attorney Rosenstein also recognized the significant assistance provided by the Criminal Division’s Office of International Affairs, and law enforcement counterparts in Switzerland, Germany, Italy, Saudi Arabia and Cyprus. Mr. Rosenstein praised Assistant U.S. Attorney David I. Salem and Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section, who prosecuted the case.