Antitrust Law Daily Wrap Up, TOP STORY: Caltrans engineer pleads guilty to bribery, bid rigging, (Apr 12, 2022)

By Wendy Biddle, J.D.

Bid rigging scheme impacted more than $8million in contracts with state transportation agency.

A former California Department of Transportation (Caltrans) engineer who accepted more than $800,000 in bribes pleaded guilty to bribery and bid-rigging, the Justice Department’s Antitrust Division has announced. In addition to his guilty plea, Choon Foo “Keith” Yong agreed to pay restitution and cooperate with prosecutors in the ongoing investigation of the scheme, which involved at least two contractors and another Caltrans employee. Each of the two counts to which Yong pleaded guilty carry maximum sentences of 10 years in prison, but according to the plea agreement prosecutors will recommend a sentence of 70 to 87 months. The restitution amount will be between $800,000 and $15 million (U.S. v. Yong, Case No. 1:14-md-02542-VSB-SLC).

Acting as a contract manager in Caltrans’ Division of Procurement and Contracts, Yong illegally influenced the bidding in contracts worth more than $8 million from 2015 to 2019, steering most contracts to a single unnamed contractor, according to the plea agreement. Yong was responsible for compiling lists of eligible bidders for projects to acquire, repair or improve Caltrans facilities. He manipulated the process by giving at least two contractors advance notice of upcoming bid opportunities, and then one or more of the contractors would submit sham bids. The scheme allowed for the primary contractor or another designated company to win the contract at inflated prices.

According to the court filings, Yong was introduced to one of the contractors by a coworker at Caltrans who told Yong he could make money through bid-rigging agreements with that contractor. Yong paid $500 a month in cash for two years to that Caltrans employee who introduced him to the primary contractor in the scheme.

In addition to the bid-rigging, Yong also accepted bribes to award no-bid contracts to companies controlled by the scheme’s co-conspirators. Those contracts were awarded on an emergency basis. For all the contracts connected with the scheme, Yong would receive at least 10% of the contract’s value. From February 2015 to December 2019, Yong received more than $800,000 in cash, goods, or services as bribery payments, according to the plea agreement.

“Today’s guilty plea is the first in the Antitrust Division’s ongoing investigation into bribery and bid rigging at Caltrans,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Given the Infrastructure Investment and Jobs Act’s $1.2 trillion authorization and the critical role of transportation infrastructure in our nation, rooting out bid-rigging schemes that cheat the competitive bidding process remains a top priority for the division and its Procurement Collusion Strike Force partners.”

In November 2019, the Department of Justice created the Procurement Collusion Strike Force, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government. The Antitrust Division’s San Francisco office, the U.S. Attorney’s Office for the Eastern District of California, and the FBI’s Sacramento Field Office conducted the investigation as part of the Procurement Collusion Strike Force. Yong’s guilty plea is the first to result from that task force.

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