A federal grand jury has indicted a Tennessee businessman in an alleged kickback scheme involving a pair of multimillion-dollar construction contracts at two Georgia military posts, Fort Benning and Fort Gordon. HYOSUB SHIN/HSHIN@AJC.COM

Feds alleging major kickback scheme at Fort Benning, Fort Gordon

Business executive indicted on kickback and wire fraud-related charges

A federal grand jury has indicted a Tennessee business executive in an alleged kickback scheme involving a pair of multimillion-dollar construction contracts at two Georgia military posts, Fort Benning and Fort Gordon.

David Kennedy, who lives in the Nashville area, pleaded not guilty this month to charges of accepting kickbacks and conspiracy to commit wire fraud. He served as the director of operations for a business identified only as “Company A” in the federal indictment. His attorney did not respond to repeated requests for comment.

The U.S. Army Corps of Engineers awarded Kennedy’s employer a $29.3 million contract in 2013 to renovate barracks at Fort Benning, near Columbus. A year later, the Corps awarded a $7.7 million contract to the same company to build a “sensitive compartmentalized information facility” at Fort Gordon, near Augusta.

Kennedy, according to the indictment, devised a scheme with a co-conspirator four years ago. In exchange for helping get the co-conspirator’s company subcontracts for the Fort Benning and Fort Gordon projects, Kennedy received $436,000 from the co-conspirator, prosecutors allege. Meanwhile, the co-conspirator submitted phony bids and invoices for work that was never done. Kennedy, the indictment says, paid a second co-conspirator $12,200 for participating in the secret plan.

This is not the first time the Georgia military installations have been at the center of major fraud investigations.

In 2015, defense contractor L-3 Communications Holdings Inc. agreed to pay $4.63 million to resolve allegations it overbilled the military for training hours at Fort Benning and at Fort Bliss in Texas. A year later, Seattle-based American Management Services paid $1.6 million to resolve criminal charges that it defrauded the U.S. Army and a real estate company while doing property management work at Fort Benning and other military posts in Virginia and California.

Last year, Calvin Lawyer, a retired Army colonel, and Dwayne Fulton, a former defense contractor employee, were each sentenced to 60 months in prison for a bribery and kickback scheme at Fort Gordon. A former Army colonel and his wife, Anthony and Audra Roper, were both sentenced to prison as part of the same criminal case in February. Prosecutors said Anthony Roper accepted bribes from Lawyer to steer more than $20 million in contracts to Lawyer’s company.

Fort Gordon released a statement this week, saying that it “takes seriously, and will turn over for prosecution, those who may have defrauded the government, including any act of kickback, which includes any money, fees, commission, credit, gratuity, gift, thing of value or compensation of any kind.”

The Corps and Fort Benning referred questions to the U.S. Justice Department, which is calling for Kennedy to forfeit $463,000 he allegedly obtained through wire fraud. U.S. Attorney Charles Peeler said through a spokeswoman that prosecuting fraud against the government is one of his office’s priorities.

“Fraud on the military affects all of us,” he said, “in that it interferes with the military’s mission to protect all Americans and American interests across the globe.”

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