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WASHINGTON (AP/ WUSA) -- Two employees of the U.S. Army Corps of Engineers and two other men have been arrested in a bribery and kickback scheme that prosecutors say involved more than $20 million in illicit payments.
An indictment unsealed Tuesday includes charges of bribery, conspiracy and unlawful kickbacks.
Prosecutors say the defendants steered a contract worth $780 million to a favored Virginia-based contractor in exchange for millions of dollars in kickbacks that paid for Rolex watches, Neiman-Marcus clothing, airline tickets, home renovations and other personal expenses.
The two Army Corps employees are Kerry F. Khan, a program manager, and Michael A. Alexander, a program director.
Also charged are Khan's son, Lee A. Khan and Harold F. Babb, the director of contracts for Eyaktek Technology, a Virginia-based contractor owned by an Alaska Native Corporation.
Congress set up special rules for Alaska Native Corporations forty years ago that allow for no-bid, sole-source federal government contracts. The program is run through the Small Business Administration. SBA Inspector General Peggy Gustafson says the contracts can go up to $1.3 billion. She's looking for ways to tighten up the oversight to avoid a repeat of this scandal.