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Guam Company President Sentenced for his Role in a Buy America Billing Scheme on a $1.8 million ARRA Funded Project

On June 27, 2013, in the Districts of Guam and the Northern Mariana Islands, Hubtec International Corporation (Hubtec) president and project manager, Young C. Kim, Tamuning, Guam, was sentenced to 2 years of probation, and ordered to pay a special assessment fee of $200 after having admitted to devising a scheme to defraud the Department of Public Works (DPW) and Federal Highway Administration (FHWA) by falsely representing that they used U.S. made reinforcement steel bars for an American Recovery and Reinvestment Act of 2009 (ARRA) funded project in Guam. 

In January 2010, Hubtec received a $1.8 million contract with the DPW for the reconstruction and rehabilitation of the Route 2 culverts. The contract was funded in part by $1.4 million in ARRA funds and required that the contractor comply with the Buy America requirement that all steel and iron permanently incorporated into the project be manufactured in the U.S.

OIG's investigation determined that Hubtec and Kim falsely represented that U.S. made reinforcement steel bars were used for the project, when in fact, they had incorporated Korean-made reinforcement steel bars which were not in compliance with applicable Buy America requirements. They also committed fraud through a billing scheme which falsely over-reported the costs of materials. Kim submitted inflated invoices to the FHWA in the amount of approximately $154,392. In June 2012, the FHWA debarred Kim for three years.

We are conducting this investigation jointly with the Federal Bureau of Investigation, with assistance provided by the FHWA.