Civilian contractor charged with bribery and kickbacks in connection to billion-dollar contracts in Kuwait

A former civilian contractor for the U.S. Army was charged in an indictment unsealed today for his role in a scheme to steer Army contracts for work to be performed at Camp Arifjan, a U.S. Army base in Kuwait.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent Jozette Gillespie, Acting Director, U.S. Army Criminal Investigation Command's (CID) Major Procurement Fraud Unit and Special Agent in Charge Robert E. Craig Jr. of the U.S. Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office made the announcement.

Ephraim Garcia, 62, was charged in an indictment filed in December 2018 in the District of Columbia with one count of offering a bribe, one count of receiving illegal gratuities, and one count of offering kickbacks.  The indictment further charges Gandhi Raj, 39, with paying illegal gratuities to Garcia.

As alleged in the indictment, Garcia worked in the U.S. Army’s Directorate of Public Works and was involved in the solicitation, award and management of various government contracts related to projects at Camp Arifjan.  In or around September 2015, Garcia allegedly approached an employee of a prime contractor and offered to pay him in exchange for his assistance in steering contracts to a particular subcontractor owned by Raj, Gulf Link Venture Company.  Garcia allegedly told the prime contractor employee that Gulf Link would artificially inflate the cost of certain of its bid proposals, and Garcia, Gulf Link and the prime contractor employee would split the proceeds.  Additionally, over a period of about five years, Garcia and/or members of his immediate family allegedly received over $170,000 in wire transfers from Raj and other individuals associated with Gulf Link and another subcontractor that was bidding on work under the prime contract.

Garcia, who retired from the Air Force in 2000 as a master sergeant, admitted to brokering the meeting, where prosecutors say he and the CEO of the firm Gulf Link Venture Co., Gandhiraj Sankaralingam, offered to pay the employee of Colorado-based Vectrus Systems Corp. to steer some of the company’s government contract business to Gulf Link.

In 2011, Vectrus was awarded the Kuwait base operations security and service support contract, for which the Army had paid out more than $2.7 billion as of 2016, the Pentagon’s Inspector General said in a report four years ago.

Sankaralingam and Garcia, who was a mechanical engineer for the Army’s department of public works on Camp Arifjan, offered to split proceeds from the inflated costs of heating and air conditioning work under that contract — possibly up to $756,000 — with the Vectrus employee if it was awarded to Gulf Link, court records state. Instead, the employee reported the illegal offer to the government.

Officials with the Pentagon IG, Defense Criminal Investigative Service and Army Criminal Investigative Command were involved in the investigation.

Garcia, who also retired after 16 years as an Army civilian in 2016, was arrested in 2019 and indicted the following year. Sankaralingam was also charged in the indictment with conspiring to offer a kickback and paying illegal gratuities to Garcia, but he remains a fugitive.

Under a plea agreement last summer, the government dropped a charge that Garcia had received some $170,000 in illegal gratuities from Sankaralingam and others at Gulf Link and another firm, which they said was sent to Garcia’s adult daughters’ bank accounts from 2010 to 2015.

“Mr. Garcia emphatically denies that this money was derived illegally,” his attorneys said pleading for the judge’s leniency in sentencing, citing their client’s age, declining health and the difficulties his family has suffered since he was arrested.

Prosecutors had sought a sentence of eight to 10 years and a fine of $165,000, citing Garcia’s net worth of more than $1 million.

But in a letter to the judge, Garcia sought probation and home confinement, citing his impoverished upbringing in the Philippines, his honorable military service, his wife’s worsening health over stress from his arrest, and his daughter’s acid reflux.

In response, prosecutors said his involvement in the kickback conspiracy was not a “one-time ‘lapse in judgment,” and suggested to D.C. District Judge Amit P. Mehta that if he were inclined toward leniency he does not sentence Garcia to less than five years in prison.

Garcia was sentenced to two years, a $200 fine, and three years of probation. The court document giving Mehta’s reasons for the sentence remains sealed.