Man pleads guilty in kickback scheme involving Fort Benning contract worth $29 million
A Tennessee businessman accused of taking kickbacks involving millions in military contracts here at Fort Benning and at Fort Gordon in Augusta has pleaded guilty in Columbus federal court.
David Kennedy, 67, of Nashville, pleaded guilty Tuesday before U.S. District Court Judge Clay Land, admitting to one count of conspiracy to violate the Anti-Kickback Act and to commit wire fraud. He faces up to five years in prison and a $250,000 fine. His sentencing has not been set.
According to his plea, Kennedy worked for a company that in 2013 was awarded a $29 million contract for work at Fort Benning, and in 2014 won a separate contract for $7.7 million at Fort Gordon. He afterward directed millions in subcontract work to Southern Atlantic Construction in exchange for thousands of dollars in kickbacks, opening a Tennessee bank account to divert the money to.
“Investigators unraveled a complicated kickback scheme concocted by the defendant to enrich himself to the detriment of the American taxpayer,” said U.S. Attorney Charlie Peeler, who thanked the FBI and the U.S. Army Criminal Investigation Command for their investigation.
According to court records, authorities alleged Kennedy got kickbacks from Gary Hamby, owner and managing partner of Southern Atlantic Construction LLC, and other Southern Atlantic employees in the form of cash and cigars, to help Southern Atlantic win subcontract bids.
Hamby pleaded guilty in 2017 to conspiracy to violate the Anti-Kickback Act. His sentencing was set for this past Feb. 11, but it was canceled and hasn’t been rescheduled.
The Fort Benning scheme began in September 2013 when Kennedy’s employer was awarded a contract to renovate the post’s Starship Barracks, authorities said.
According to a federal indictment, Kennedy told Hamby in February 2015 that Southern Atlantic would be awarded a subcontract on the Benning project if Hamby paid Kennedy kickbacks. Southern Atlantic later sent Kennedy an $800 box of cigars and $5,000 in cash, the indictment said.
In May 2015, Southern Atlantic was awarded the subcontract for about $538,000, according to the indictment.
From May 2015 to December 2015, Kennedy’s company awarded Southern Atlantic nearly $1.4 million through purchase orders and contract modifications, and some of that money was sent back to Kennedy, the indictment said.
From July 2015 to December 2015, Hamby paid Kennedy $383,000 in Benning kickbacks, most of it funneled from the bank account of a shell company Hamby created to Alexis Development & Investments, a shell company Kennedy created, the indictment said.
This story was originally published June 17, 2020 at 4:19 PM.