Former GSA employee took bribes for federal contracts

Dessie Ruth Nelson, a longtime employee of the U.S. General Services Administration (GSA), pleaded guilty to accepting more than $100,000 in bribes for her role in awarding three federal contracts worth more than $130 million.

Nelson, 65, of Oakland, Calif., also pleaded guilty to evading taxes on the bribe payments, according to the Department of Justice.

According to the plea agreements of Nelson and former Montgomery County, Md., police officer Michael Holiday, Nelson worked in San Francisco and was responsible for contracting on behalf of the GSA with private companies to provide security to GSA-managed buildings. Holiday was the chief executive officer and owner of Silver Spring, Md.-based Holiday International Security Inc. (HIS), which provided federal facilities with physical security, primarily through armed guards. In May 2003, HIS changed its name to USProtect Corp., according to the Department of Justice.

Between 2000 and 2003, Holiday and other contractors provided Nelson with cash, vacations and other benefits worth more than $100,000 in exchange for Nelson’s assistance in awarding three multimillion-dollar contracts to HIS.

Investigators tracked case from Maryland to California

One of the contracts involved GSA-managed federal buildings in San Diego and three other counties in Southern California. The GSA solicited bids for a contract to provide security services to these federal facilities in November 1999. Although HIS’ bid was nearly $10 million higher than the lowest bid received by the GSA, Nelson awarded the contract to HIS in May 2000.

From 2000 through 2004, the GSA paid HIS and USProtect more than $54 million as a result of the contract.

In February 2001, the GSA solicited bids to provide security to federal facilities in San Francisco and seven other counties in Northern California. Although HIS did not submit the lowest bid price, Nelson awarded the contract to HIS in June 2001 at a cost of more than $30.5 million. From 2001 through the present, the GSA paid HIS and USProtect more than $30 million as a result of the contract.

In January 2002, HIS submitted a proposal for a contract to provide security to Social Security Administration (SSA)-operated facilities in Baltimore. Nelson sent the SSA responses that she prepared to a questionnaire regarding HIS’ performance of its California contracts. Although HIS had experienced problems, Nelson provided all favorable ratings for HIS. Based in part on this recommendation, the SSA awarded the contract to HIS.

From 2002 through the present, the SSA paid HIS and USProtect more than $50 million pursuant to this contract.

“Federal investigators have followed the evidence in this case across the nation, from Maryland to California, to ensure that anyone involved in this corruption scheme will be held accountable,” said U.S. Attorney Rod Rosenstein. “This case demonstrates the harm that can be caused by a corrupt contracting officer.”

In exchange for contracts, Nelson received cash and a cruise

Nelson admitted that in return for her assistance in obtaining the above contracts, Holiday provided her with a shopping bag containing $35,000 in cash and an envelope containing $10,000 in cash, among other benefits. Holiday also arranged for and paid $7,000 for Nelson’s passage on a Caribbean cruise.

Nelson admitted that she failed to report the cash and other illicit payments from Holiday and other contractors as income on her federal individual income tax returns for 2000 through 2003. Nelson concealed the income by arranging to make cash deposits into her bank accounts in amounts that did not exceed $10,000, in order to evade federal reporting requirements regarding cash transactions.

Nelson faces up to 15 years

According to the Department of Justice, Nelson faces a maximum sentence of 15 years in prison on the bribery charge and five years in prison for tax evasion. U.S. District Judge Deborah Chasanow scheduled her sentencing for June 16.

Holiday, 50, of Silver Spring, Md., also pleaded guilty to bribery and tax evasion in connection with the scheme.

In a related case, Richard Hudec, 44, of Naples, Fla., who was a former chief operating officer of USProtect, pleaded guilty on Nov. 30 and faces a maximum sentence of five years in prison for concealing material information from federal contracting officials—including four prior felony convictions—in connection with federal contracts worth more than $150 million that were awarded to USProtect.

Hudec also pleaded guilty to evading taxes on income he obtained as a result of the government-awarded contracts and faces five years in prison and a $250,000 fine for the tax evasion. Judge Chasanow scheduled Hudec’s sentencing for Feb. 25.