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FBI: Annandale-Based Businessman Sentenced in Bribery, Fraud Case

Oh Sung Kwon to pay $1,188,500 in restitution and the same amount in a forfeiture money judgment.

Vienna businessman Oh Sung Kwon, 48, was sentenced Monday to 46 months in prison on federal charges stemming from a bribery scheme and fraudulent real estate sales. FBI logo
Vienna businessman Oh Sung Kwon, 48, was sentenced Monday to 46 months in prison on federal charges stemming from a bribery scheme and fraudulent real estate sales. FBI logo

Vienna businessman Oh Sung Kwon, 48, was sentenced Monday to 46 months in prison on federal charges stemming from a bribery scheme in which he paid thousands of dollars to an army official in return for government contracts, as well as a separate scheme involving fraudulent real estate sales and refinances, according to a news release from the FBI.

Kwon, also known as Thomas Kwon, of Vienna, pled guilty in September 2012 in the U.S. District Court for the District of Columbia to one count each of bribery, conspiracy to commit bank fraud, and willful failure to file a tax return. He was sentenced by the Honorable Emmet G. Sullivan. Judge Sullivan also ordered Kwon to pay $1,188,500 in restitution and the same amount in a forfeiture money judgment. Upon completion of his prison term, Kwon will be placed on three years of supervised release.

Kwon was the co-founder and chief executive officer of Avenciatech Inc., a government contractor based in Annandale. He is among 17 people and one corporation that pled guilty to federal charges for their roles in the largest domestic bribery and bid-rigging scheme in the history of federal contracting. The investigation is continuing.

According to a statement of offense signed by the government and the defendant, Kwon learned of a contract-steering scheme from two business contacts: Alex N. Cho, who was then the chief technology officer for Nova Datacom LLC, and a second Nova Datacom employee. This scheme involved contracts and subcontracts awarded through the U.S. Army Corps of Engineers in return for hundreds of thousands of dollars in payments to Kerry F. Khan. At the time, Khan was a program manager at the Army Corps of Engineers.

Kwon’s role in the scheme involving the Army Corps of Engineers included Kwon arranging for Cho and another Nova Datacom employee to exchange checks for approximately $700,000 in cash, which was paid to Khan in exchange for government contracts. Kwon later attempted to obstruct the resulting criminal investigation by destroying evidence. However, he also disclosed to law enforcement authorities the efforts by Cho and another Nova Datacom employee to obstruct the criminal investigation, including Cho’s attempts while wearing a recording device to prevent Kwon from making incriminating statements.

Kwon learned of a second, similar scheme involving another business contact: Nick Park, a former Nova Datacom employee who was then the president of Unisource Enterprise Inc. Kwon learned through Park that he had obtained a subcontract for his company by agreeing to pay bribes to a person identified in court documents as “Public Official C.” This official, based at the time in Seoul, South Korea, was an assistant project manager for the U.S. Army who had responsibilities for a major contract.

In or about February 2009, Kwon traveled to South Korea to meet Public Official C. In exchange for an undisclosed ownership interest in Avenciatech, Public Official C agreed to use his official position to steer subcontracts from the Army to Avenciatech. Plans later called for Public Official C to have a 40 percent ownership interest in the company.

In September 2009, Avenciatech obtained an army subcontract in the amount of $366,844. However, army change orders later increased the value of this subcontract to $1,913,059. Avenciatech also obtained a second contract in February 2011 in the amount of $551,093. Change orders later increased its value to $1,413,513.

In exchange for the official assistance of Public Official C, Kwon made a series of bribe payments. They included cash payments; payments for hotel stays for Public Official C and family members, including a trip to the Atlantis resort in the Bahamas; payments to finance the purchase of a 2010 Lexus automobile; and payments for other things of value.

Kwon also assisted Public Official C in obtaining financing for the purchase of a home in Fairfax Station, where Public Official C resided following his reassignment in 2010 to a position at Fort Belvoir. Public Official C wanted to make a $230,000 down payment on the home purchase but did not want to face questions about the source of the money in Public Official C’s bank account. 

Instead, Public Official C transferred the $230,000 to an account of an Avenciatech employee, Helen Woo. Kwon caused Woo, in turn, to execute a phony “gift letter” claiming that she was Public Official C’s cousin and that she was providing the $230,000 to a settlement company for the home purchase.

Kwon also pled guilty and was sentenced today on charges in a separate scheme involving bank fraud. In addition to running Avenciatech, Kwon was the operations manager for Onyx Financial Services, a mortgage broker based in Annandale. He admitted involvement in at least six fraudulent real estate sales and refinances in northern Virginia, with loan amounts of about $1.8 million. Finally, Kwon pled guilty and was sentenced today for the willful failure to file a tax return. This charge involved his 2010 income tax return.

Cho, Khan, Park, and Woo are among those pleading guilty in the case.

Cho pled guilty to one count of conspiracy to commit bribery, money laundering, and wire fraud and to defraud the United States and one count of bribery. Khan pled guilty to one count each of bribery and conspiracy to commit money laundering. Park pled guilty to two counts of bribery. Woo pled guilty to a misdemeanor fraud charge for her role in the home financing scheme.

Khan was sentenced to 19 years and seven months in prison. Woo was sentenced to two years of probation. Cho and Park are awaiting sentencing.

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