Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SALT LAKE CITY — A man involved in a scheme to fraudulently obtain a $99 million contract from the government has been ordered to serve federal prison time and forfeit over $2 million from multiple banks accounts.
Kin Shing Paul Lee was sentenced Tuesday to a year in prison, according to court records. After his prison term, he'll be on supervised release for 24 months. He reports to prison on March 7.
Lee pleaded guilty to wire fraud, money laundering, and aiding and abetting preparation of a false tax return, according to court records.
In addition to the prison term, he was ordered to forfeit $2,271.841.16, the exact amount that Arizona resident Whitney McBride was ordered to forfeit in her sentencing for her involvement in the same scheme.
Her company, Odyssey International, was fined $5 million, according to court records.
During her trial in May, the company admitted that its application for government contracts was fraudulent but placed the blame on Lee, Odyssey's former chief financial officer who had already pleaded guilty to wire fraud. The company's former chief operating officer, Michael Tingey, also pleaded guilty to wire fraud, according to a news release. Tingey's sentencing is set for Feb. 23.
The jury ultimately decided to convict McBride and the company on all counts, according to court records.
McBride and Odyssey International were initially accused of fraudulently claiming special status under the U.S. Small Business Administration in order to bid on a contract to work at the Fort Drum military base in New York, according to a news release from the Utah U.S. Attorney's Office. Prosecutors described McBride as Odyssey's founder and owner.
A superseding indictment from October accused McBride and the company of carrying out a scheme to obtain contracts through the SBA set aside for businesses in "historically underutilized business zones." Often the areas that qualify as historically underutilized business zones include Native American reservations and areas with a closed military base, the news release says.
In order to qualify for those zone contracts, businesses must have at least 35% of employees living in the zones and the contracts must be awarded to small businesses. The program is meant to award government defense contracts in the hopes of economically stimulating the underutilized areas, according to the indictment. The program is also meant to "provide contract opportunities to businesses owned by individuals who have personally experienced discrimination," the news release says.
Odyssey and McBride were accused of falsifying information in order to claim the company qualified for government contracts. Much of the criminal conduct took place in Utah, prosecutors say, though Utah business records list the company as being based in Arizona.
Prosecutors say that in 2011, Odyssey placed the bid to work at the New York military base knowing it did not meet the historically underutilized business zone standards. The company did not have 35% of employees living in the zone and Odyssey was not a small business, prosecutors say.
Odyssey had employees falsify addresses on their driver's licenses and voter registrations to show they lived in the designated zone, charging documents state. The company also placed zone residents who did not work for the company on the payroll in order to claim them as employees. Odyssey also used a shell company to pay employees outside of the zone away from the company's records to hide them from the SBA, federal prosecutors say.
Charging documents point out individual instances that allowed Odyssey to misrepresent itself, including an instance where an employee's paycheck was split between him and his wife in order to also list her as another historically underutilized business zone resident. The company also requested that an employee change their voter registration to a relative's address to give the appearance they lived at the address, the indictment says.
The company was later admitted to the government program and obtained over $200 million in contracts over nine years.
