SK E&C slapped with $68.4m fine in US

SK Engineering and Construction was handed a $68.4 million penalty by a US court Thursday on charges of bribing an official to win an Army contract.

The Department of Justice said in a press release that the Court for the Western District of Tennessee has ordered SK E&C to pay $60.6 million in criminal fines along with $2.6 million in restitution to the Army and serve three years of probation.

The fine is the largest ever imposed against a criminal defendant by the federal district court.

In 2008, SK E&C won a 460 billion won ($385 million) contract to build infrastructure -- including road, water, sewage and power systems -- for the US Forces Korea’s headquarters, Camp Humphreys in Pyeongtaek, Gyeonggi Province.

After the company was alleged to have offered about $3 million in kickbacks to an official in 2010, the legal authorities in Korea and the US started the investigation in 2015.

The US Army previously suspended SK E&from bidding for future contracts through an order on Nov. 17, 2017.

In a separate settlement, SK E&C has also entered into a False Claims Act settlement with the US, under which it is obligated to pay $5.2 million in civil penalties.

According to the Justice Department, SK E&C agreed to cooperate fully with the US in all matters relating to the misconduct, and also to continue to implement a compliance and ethics program designed to prevent violations.

“SK E&C paid millions of dollars to secure contracts with the Army and submitted false claims to conceal those illicit payments,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division.

“Today’s guilty plea and substantial criminal penalty sends a clear message that companies who voluntarily self-disclose misconduct, cooperate, and remediate will receive appropriate credit for their efforts. But companies like SK E&C -- which withheld and destroyed documents, attempted to persuade a witness not to cooperate, and failed to discipline any responsible employees -- will pay the price.”

By Jo He-rim (herim@heraldcorp.com)