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Investigation Produces Second Plea: FHWA Contractor Pleads Guilty to Bribery, Money Laundering Charges

American Government Special Collections Reference Desk

American Government Topics:  Federal Highway Administration

Investigation Produces Second Plea: FHWA Contractor Pleads Guilty to Bribery, Money Laundering Charges

USDOT Office of the Inspector General
October 6, 1998

FOR IMMEDIATE RELEASE
Tuesday, October 6, 1998
Contact: Jeff Nelligan
Telephone: (202) 366-6312
OIG 33-98

In an ongoing bribery and corruption investigation conducted by the FBI and the U.S. Department of Transportation’s Office of Inspector General (OIG), Hobih Chen, president and owner of the Viggen Corporation, Sterling, Va., pleaded guilty this week to conspiracy, bribery, and money laundering charges.

Chen, of Herndon, Va., faces up to five years in jail and $250,000 in fines.

"As the second target in this wide-ranging investigation faces fines and possible incarceration, it should be clear to all that contract fraud will be pursued aggressively and that the penalties associated with these crimes can be severe," said Inspector General Kenneth M. Mead.’

The charges stem from an extensive investigation that has already netted Alberto Santiago, former Chief of State Programs at the Federal Highway Administration (FHWA), who pleaded guilty last month to related bribery, fraud, and money-laundering charges.

Viggen Corp. was a contractor to the FHWA. Viggen and other contractors used Federal contracts worth millions of dollars to fraudulently generate funds to pay bribes and gratuities to Santiago, who oversaw FHWA contracts. These contracts involved the development of new technology to simulate and study traffic congestion using computers.

According to the charges, from 1993 through March 1998 Chen and others conspired to pay Santiago between $150,000 and $200,000 in cash and money orders; between $70,000 and $80,000 of that amount was paid by Chen.

In return for those gratuities, Santiago agreed to allow Chen and other contractors to submit fraudulent invoices to reimburse themselves for their illegal payments to Santiago. The charges indicate Chen and others conspired to submit between $200,000 and $250,000 in fraudulent invoices to recoup illegal payments to Santiago. Court documents indicate Chen recruited another contractor to submit fraudulent invoices and make illegal payments to Santiago.

The money-laundering conspiracy stems from a fraudulent scheme to obtain $100,000 in FHWA funds, wire the funds overseas and then back to the United States, and then convert the proceeds to cash. The purpose of this cash was to pay off a contractor who earlier made illegal cash payments to Santiago.

Chen has agreed to cooperate in the continuing investigation.

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