This is a follow-up to the June 2, 2021 post we did — SDNY Charges @StateDept Contractor in Multimillion-Dollar Fraud Schemes, Then There’s “Insider-1” at OBO.
Investigators working for the State Department’s inspector general suspect May Salehi took massive kickbacks to get out from under a mountain of debt https://t.co/9vw9oIUmpA
— The Daily Beast (@thedailybeast) May 28, 2021
On September 20, 2021, the Justice Department announced that May Salehi, a former State Department employee, pled guilty today to conspiracy to commit honest services fraud. See U.S. v. May Salehi.
Below is the USDOJ announcement: Former State Department Employee Pleads Guilty To Honest Services Fraud Scheme
May Salehi Provided Confidential Bidding Information to a Bidder and Received Lucrative Kickback Payments in Return
Audrey Strauss, the United States Attorney for the Southern District of New York, Michael Speckhardt, the Special Agent in Charge of the U.S. Department of State, Office of Inspector General (“State Department OIG”), and Thomas Fattorusso, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New York Field Office (“IRS-CI”), announced that MAY SALEHI, a former State Department employee, pled guilty today to conspiracy to commit honest services fraud. SALEHI was a longtime State Department employee who was involved in evaluating bids for critical overseas government construction projects such as U.S. embassies and consulates. SALEHI gave confidential inside bidding information to a bidder, and received $60,000 in kickback payments in return. SALEHI surrendered today and pled guilty before United States Magistrate Judge James L. Cott. SALEHI’s case is assigned to United States District Judge P. Kevin Castel.
Manhattan U.S. Attorney Audrey Strauss said: “As a State Department employee, May Salehi was entrusted to serve the public. Instead, she abused her position of trust to line her own pockets, as she admitted today. Salehi revealed, and traded on, confidential information – corrupting the bidding process and receiving lucrative kickbacks in return. Together with our law enforcement partners, this Office is committed to rooting out corruption.”
State Department OIG Special Agent in Charge Michael Speckhardt said: “The State Department OIG is dedicated to preserving the integrity of the Department’s programs and processes. As government employees, we are entrusted to carry out our responsibilities with integrity and support an equitable process. May Salehi did just the opposite. She used her position of public trust to selfishly obtain a personal financial advantage by selling proprietary contracting information for profit. Today’s plea, the culmination of extensive investigative and prosecutorial efforts, demonstrates that those who violate the public’s trust will be held accountable for their actions.”
IRS-CI Acting Special Agent in Charge Thomas Fattorusso said: “May Salehi violated the trust of the American taxpayer by putting her personal financial gain over her responsibilities to safeguard confidential information and government resources. Today’s guilty plea shows IRS-Criminal Investigation will continually work with our law enforcement partners to protect the American taxpayer from this type of abuse.”
According to the allegations in the Information, court filings, and statements made in court:
From 1991 until mid-2021, MAY SALEHI was a State Department employee. For many years, SALEHI worked as an engineer in the State Department’s Overseas Building Operations division (“OBO”), which directs the worldwide overseas building program for the State Department and the U.S. Government community serving abroad.
In 2016, the State Department solicited bids for a multimillion-dollar construction project known as a compound security upgrade to be performed at the U.S. Consulate in Bermuda (the “Bermuda Project”). The bidding process involved the submission of blind, sealed bids from various bidders. Six companies submitted sealed bids, one of which was named Montage, Inc. (“Montage”).
SALEHI was involved in the Bermuda Project in several respects. Among other things, SALEHI served as the Chair of the Technical Evaluation Panel (“TEP”) – a panel of experts that evaluates the technical aspects of bids, including whether they meet the State Department’s structural and security needs. In connection with the Bermuda Project, the TEP disqualified one bidder, but determined that the other five bids (including Montage’s bid) were technically acceptable.
In September 2016, the State Department’s employees who evaluate the cost of bids gave the remaining five bidders (including Montage) the opportunity to re-bid, if they wished to do so. Montage had two days to decide whether to submit a re-bid. During that two-day window, Montage’s principal, Sina Moayedi, spoke with SALEHI by phone and sought confidential inside bidding information about the relationship between Montage’s bid and those of its competitors, which SALEHI supplied. SALEHI knew that this information was confidential, and that it was unlawful to provide it to a prospective bidder. After Moayedi received this inside information from SALEHI, Montage immediately increased its bid by $917,820. In its revised submission to the State Department, Moayedi and Montage lied as to the reason it had increased its bid by nearly $1 million, falsely claiming that it had discovered “an arithmetic error” in its estimates. Montage was ultimately awarded the Bermuda Project with a revised bid of $6.3 million.
In the months that followed, Moayedi paid SALEHI a total of $60,000 in kickbacks, which he paid in three installments. In making these kickback payments, Moayedi used intermediaries to obscure the link between him and SALEHI. To conceal the true purpose of the kickback payments, SALEHI also gave one of the intermediaries a Persian rug. SALEHI did not report the $60,000 kickback payments on her State Department financial disclosure form.
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SALEHI, 66, of Washington, D.C., pled guilty to one count of conspiracy to commit honest services fraud, which carries a maximum sentence of five years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as SALEHI’s sentence will be determined by Judge Castel.
Sina Moayedi was arrested on May 28, 2021, on three charges contained in a criminal Complaint: wire fraud, conspiracy to commit wire fraud, and bribery of a public official. The charges against Moayedi are pending.
Ms. Strauss praised the outstanding investigative work of the State Department OIG, Special Agents from the United States Attorney’s Office for the Southern District of New York, and IRS‑CI. She also thanked Special Agents from the United States Attorney’s Office for the District of Columbia and the Montgomery County, Maryland, Police Department.
The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case. Assistant U.S. Attorneys Michael D. Neff and Louis A. Pellegrino are in charge of the prosecution.