Guam – U.S. Attorney Alicia Limtiaco has announced that a federal grand jury has indicted HUBTEC INTERNATIONAL CORPORATION (“HUBTEC”) and its President and Project Manager, YOUNG C. KIM, on four (4) counts of Wire Fraud, seven (7) counts of Making False
Statement in Connection with Highway Project, and one (1) count of Major Fraud Against the United States.
YOUNG C. KIM managed and directed the business operations of HUBTEC, a general contractor business operating in Guam that was engaged in the business of highway road construction in constructing concrete retaining wall structures, concrete slide walls and culverts.
In January 2010, HUBTEC received a contract with the Department of Public Works (“DPW”) for the Reconstruction/ Rehabilitation of the Route 2 Culverts, including the Umatac Baseball Field culvert, and Cetti Bay Slide Repair (Along Route 2, Agat & Umatac) (“Project”), in the amount of $1,835,040. The contract, approved by the U.S. Secretary of Transportation, received funding in part from the American Recovery and Reinvestment Act (“ARRA”) of 2009, and required that the contractor comply with the Buy America requirement that all steel and iron that were to be permanently incorporated into the project be manufactured in the United States unless a waiver was granted by the Federal Highway Administration (FHWA) of the U.S. Department of Transportation.
The indictment alleges that HUBTEC and YOUNG C. KIM (“defendants”) devised and participated in a scheme to defraud the DPW and FHWA by falsely representing that they used U.S.-made reinforcement steel bars for the Project, when in fact, the defendants well knew they incorporated Korean-made reinforcement steel bars in the Project which were not in compliance with applicable Buy America requirements. The indictment further alleges that the defendants committed fraud in connection with the Project through a fraudulent billing scheme, which falsely over-reported the costs of materials.
The indictment handed down today reflects the strong commitment of the Department of Justice and the Department of Transportation and its Office of Inspector General to ensure that ARRA funds are properly awarded and expended in accordance with federal law and regulations.
The charge for Wire Fraud carries a maximum prison term of 20 years and a fine of up to $250,000; Making a False Statement – 5 years/$250,000 fine; and Major Fraud Against the United States – 10 years/$1,000,000 fine.
This investigation was conducted by the Federal Bureau of Investigation and the United States Department of Transportation, Office of Inspector General.
Members of the public are reminded that an Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.