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U.S. freezes bank account of Afghan contractor accused of bribery

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Watchdog Blog,Michal Conger,Afghanistan,Foreign Aid,Corruption,Military Budget,Waste and Fraud

Department of Justice officials have frozen more than $63 million in U.S. funds in the bank account of an Afghan contractor who is accused of bribing his way into thousands of overpriced contracts to transport goods for the U.S. military.

Hikmatullah Shadman, who owns a trucking and construction company, bribed his way into at least 5,421 delivery jobs, worth $77.9 million, between November 2010 and March 2012, when an investigation by the Special Inspector General for Afghan Reconstruction shut down his fraud scheme.

"We are determined to use all possible means to recover stolen taxpayer money. This hits the criminals where it hurts. SIGAR will stop at nothing to follow this money trail wherever it leads," said SIGAR John F. Sopko in a statement.

Hikmatullah allegedly bribed the operations managers at TOIFOR, the Hungarian company that awards subcontracts for truck shipments for the U.S. military, for contracts at inflated prices, according to a complaint filed with the U.S. District Court.

The trucker had employees deliver envelopes of cash, all in $100 bills, to TOIFOR's operations manager in return for the jobs, a practice that continued under that manager's replacement, according to the court documents. He also allegedly wired thousands of dollars to bank accounts of Operations Manager Paul Hele and Hele's wife and brother.

When another Afghan contractor approached Hele asking why his low bids were rejected, the TOIFOR manager urged the contractor to bid higher and help rig prices, explaining, "The Americans have a lot of money."

Hikmatullah received 90 percent of the low-risk routes and many of the high-risk routes during the period, even when he was the highest bidder or didn't submit a bid at all, according to court documents. He also allegedly helped manipulate and inflate contract prices, which both he and TOIFOR employees received cuts of.

This is the first time the U.S. has attempted to seize funds held by an Afghan contractor in an Afghan bank, according to SIGAR. DOJ and investigators have removed $10.1 million from Hikmatullah's accounts so far, and are actively pursuing the rest.

It's not the first time the U.S. military has been defrauded by trucking contractors in Afghanistan, however. Truckers running an ongoing fuel-theft scheme at Forward Operating Base Salerno in Khost Province stole almost 53,000 gallons of fuel per month until SIGAR helped shut them down in December 2012.

More than 60 Afghan fuel truck truckers were stealing between 600 and 2,400 gallons of fuel from their deliveries, which they could sell on the black market. The drivers were barred from U.S. and NATO installations in Afghanistan, and SIGAR works with the Afghan attorney general's office to prosecute them locally.

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