Dracut Contractor Pleads Guilty In Navy Bribery Scandal
Jun 06, 2019 12:20AM
By Lisa Redmond
BOSTON – The president and co-owner of a Chelmsford-based construction company pleaded guilty on Wednesday in U.S. District Court to charges he bribed a United States Navy contracting official on two occasions in connection with federal construction projects in Singapore worth more than $1 million, according to court documents.
Hector Sanchez, 52, of Dracut, pleaded guilty to two counts of bribery of a public official, according to the U.S. Attorney’s office. U.S. District Court Senior Judge George O’Toole Jr. scheduled sentencing for Sept. 19.
According to the indictment, the U.S. Department of the Navy awards millions of dollars’ worth of contracts to government contracting companies, such as P&S, each year for planning, building and maintaining Naval facilities.
Sanchez, the president and co-owner of P&S in Chelmsford, allegedly paid a total of $15,000 to a Naval contracting official from the Naval Facilities Engineering Command Far East in Singapore in exchange for the official’s assistance in circumventing the assessment of liquidated damage against P&S. A liquidated damage assessment essentially compensation to the government for the “harm caused’’ by a late delivery or missed deadline under a contract.
In September 2012, NAVFAC Far East in Japan awarded multiple contracts for contractors, including P&S. On Sept. 22, 2014, NAVFAC Far East awarded P&S a contract of $268,517 for, among other things, replacement of a drop-arm security barrier at the entrance of the Berth area, PSA Sembawang, Singapore. The delivery date was March 23, 2105 which was later extended to May 9, 2015.
P&S was then awarded another contract on Sept. 26, 2014 for $778,162 for repair of perimeter fencing at PSA Sembawang, Singapore. The extended delivery date was July 7, 2015.
A review of P&S performance schedule was “unsatisfactory’’ for the fencing with the amount of liquidated damages set at $46,900. The company received a “marginal’’ rating for the drop arm and was assessed liquidated damages of $22,200.
Having liquidated damages against P&S could adversely impact the company’s ability to secure future, lucrative government contracts, according to court documents. The Naval
contracting official allegedly targeted in the bribery scheme was the person who had the final authority in influencing the liquidated damages.
In recorded conversations between Sanchez and the Naval official, Sanchez allegedly stated that the liquidated damage assessments would hurt P&S’ ability to obtain government contracting work in the future. Sanchez asked to meet with the Naval official to determine if they could “fix’’ the matter, documents state.
Subsequently, Sanchez delivered $10,000 in June 2016 and $5,000 in December 2016 to the Naval official in Singapore while federal agents conducted covert surveillance. During recorded conversations, Sanchez allegedly told the Naval official that P&S was “looking for the LDs [liquidated damages] to go away.” Sanchez also stated, “This is the first time we’re doing something, okay? Let’s keep it up … This is not a onetime deal … This is business.”
The charge of bribery of a federal public official provides for a sentence of no greater than 15 years in prison, three years of supervised release and a fine of $250,000, or three times the monetary equivalent of the bribe, whichever is greater. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.