11 February 2014
A former vice-president of Bechtel Corporation is to stand trial in America on charges of accepting more than $5m in bribes while working on a joint venture between the engineer and the Egyptian government.
Dr Asem Elgawhary is alleged to have taken the money while acting as general manager of the joint venture, Power Generation Engineering and Services Company (PGESCo).
Between 1996 and 2011 PGESCo had the job of awarding contracts on behalf of the state-owned Egyptian Electricity Holding Company (EEHC).
He is accused of giving three firms confidential information about the bidding process in return for payments to Swiss bank accounts that he controlled.
In return, the companies secured more than $2bn in contracts with EEHC. The allegations did not name the companies involved, but indicated that none were based in America.
The court documents claim that Elgawhary used money from one of his Swiss bank accounts to buy a $1.8m home in Maryland for two family members. In order to conceal the origin of the money, Elgawhary made it appear that the money was from an unsecured loan from a marketing company that was owned and operated by another relative.
A grand jury in Maryland indicted the 72 year old, who was a principal vice-president of Bechtel, yesterday.
A press statement for the FBI said Elgawhary would be prosecuted on eight counts of defrauding his former employers, laundering the proceeds of that fraud, destroying evidence and violating federal tax laws.
As well as the fraud and money laundering charges, the indictment alleges that Elgawhary sent Bechtel executives and members of the PGESCo board in Maryland documents and "representation letters" to show there were no violations or possible violations of law or regulations that should be included in PGESCo’s financial statements.
In addition, when Elgawhary was interviewed by counsel for Bechtel in April 2011, he claimed that he never received money from power companies or their consultants and that he did not maintain control over any foreign bank accounts.
Elgawhary was indicted by a Maryland grand jury yesterday on eight charges
With the help of other employees at PGESCo, Elgawhary allegedly caused evidence about the kickback scheme to be deleted and destroyed, according to the charges.
Elgawhary left PGESCo in 2011 and took up the role of chairman of the Cairo-based Power Engineering Services Company (PESCO).
According to its website, PESCOÂ is made up of experts with more than 40 years’ experience in the Egyptian electricity generation sector.
Each of the fraud charges carries a maximum penalty of 20 years in prison and a fine of up to twice the value of the money gained. Conspiracy to commit money laundering carries a maximum penalty of 20 years in prison and a fine of up to twice the value of the property involved in the transaction. The tax evasion charge carries a maximum penalty of three years in prison and a fine of $5,000.
Richard Weber, chief of the Internal Revenue Service’s Criminal Investigation Department, said: "Mr Elgawhary has been charged with using his corporate position for his own personal gain. No matter what your career or position is in a corporation, all US citizens are obligated to comply with the tax laws."
The FBI statement did not reveal the identities of the companies that supposedly paid the kickbacks to Elgawhary, but investigators acknowledged the help they had received from the authorities in Switzerland, Germany, Italy and Cyprus.
"As today’s indictment alleges, this high-ranking executive took millions of dollars in kickbacks from power companies in exchange for preferential treatment and, in doing so, defrauded his former employer, other companies who were playing by the rules, and U.S. tax authorities," said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
David Schertler, the attorney who is representing Elgawhary, sent an email to The Wall Street Journal yesterday to say his client "adamantly denies the allegations made against him in the indictment and looks forward to the opportunity to contest the charges in court".