US accuses Halbert of money laundering in connection with Lyon bribery scheme
- Category: News
- Published: Tuesday, 19 March 2019 06:05
- Written by Bill Jaynes
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By Bill Jaynes
The Kaselehlie Press
February 15, 2019
Honolulu—The United States Government has charged Master Halbert of the FSM’s Department of Transportation, Communications and Infrastructure with conspiracy to launder money from the US. The charge is related to his alleged acceptance of bribes from Lyon Associates, Inc. to help Lyon to secure the $7.8 million Pohnpei Airport construction contract.
The charges contained in the complaint are merely allegations and Halbert is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The US Government filed the allegations against Halbert on January 24. The US District Court in Hawaii sealed them but recently made them public.
According to eyewitnesses, FBI agents took Halbert into custody on February 11, 2019 at the airport in Honolulu as he was preparing to return to Pohnpei. His initial appearance at the US District Court for the District of Hawaii was at 2:00 on February 12. His pretrial detention hearing is scheduled for February 13. A preliminary hearing is scheduled for February 22.
The charges against Halbert are related to charges the US filed against Jim Lyon of Lyon Associates, who on January 22 pleaded guilty to, among other things, bribing Halbert in violation of the Foreign Corrupt Practices Act. While the charges against Lyon listed Micronesian Official 1 and Micronesian Official 2, the criminal complaint against Halbert did not list Micronesian Official 2 as the Micronesian Official 2 did not appear to be involved in the specific charge against Halbert.
The United States charged Halbert only with the crime against the United States itself and not for bribery. Any charges for corruption in the FSM would have to be filed in the FSM by the FSM Department of Justice. According to a statement from FSM Information Services, the United States has agreed to share pertinent details of their investigation with FSM law enforcement officials. The FSM Department of Justice has not yet filed charges against anyone in the matter of alleged bribery.
Lyon entered into a cooperation plea agreement and has provided information to the government under that agreement, the Halbert Criminal Complaint says. “The government may move the sentencing court for a reduction in Lyon’s sentence if he substantially assists the government’s investigation and is truthful,” it says. Lyon is set to be sentenced in May.
The FBI’s Special Agent Aryn Nohara filed the complaint at the United States District Court for the District of Hawaii. It was signed by US Magistrate Judge Kenneth J. Mansfield. “Because this affidavit is submitted for the limited purpose of establishing probable cause in support of criminal complaint and an arrest warrant, it does not set forth each and every fact that I have learned during the course of this investigation,” Agent Nohara’s affidavit says.
Information gathered in the investigation included bank records, travel records, witness statements, and apparently email communications.
The complaint said that on about May 3, 2010, Halbert sent an email to Lyon and a person the complaint lists as Co-Conspirator 1, an American citizen who lived in the FSM at the time. The email regarded an FSM auditor’s concerns about the purchase of a vehicle. “I know I should protect myself and [not] put this in writing or discuss this in e-mail or any form of communication that can provide as a concrete evident [sic] and come back and used against me but its ok, if you want to take me down no problem.” The complaint says that Halbert wrote and threatened that if Lyon and Co-Conspirator 1 were not willing to back him up in confronting the auditor, then Halbert did “not think [they] should do business together again.”
FSM’s National Public Auditor Haser Hainrick said that he had looked back over the audits on his office’s website. The only audit that might have caused an auditor to ask questions regarding a vehicle at around that time was the audit issued on January 27, 2011 on professional and market premiums for FSM national government employees. He said that he had asked two members of his staff who were employees at the time, one of whom directly worked on that audit if they remembered any questions being raised about a vehicle. He said they didn’t recall anything like that but they had been concentrating on the professional and market premiums information. That audit revealed that at least one government employee had likely falsified their education achievements in order to qualify for a professional premium which increases the base salary for a position by 90%. The matter was referred to the Compliance Investigation Division which after investigation referred the matter to the Department of Justice.
The complaint said that on June 2, 2011, Halbert sent an e mail to Co-Conspirator 1, stating,”I am sorry to do this but I really your [sic] help again. We came with $3000 and we have already used half of that in food and shopping. Can you and Jim [Lyon] give me $1,500.00 and this should last us for the rest of the trip.”
On December 1, 2011, Halbert emailed Co-Conspirator 1, “Can you ask Jim for some money? I need $1000 and if ok, you can give it to me when we get to Hawaii.”
“In connection with his plea, Lyon admitted that in or around 2012, Lyon and his co-conspirators purchased an automobile for HALBERT’s personal use in order to obtain and retain business for Lyon and Engineering Company,” the complaint said. The new Ford truck that Halbert had specified was purchased in the US and shipped to the FSM.
On May 7, 2014, Halbert sent an email to Co-Conspirator 1, with the subject line, “Per dium,” [sic] stating, “Please bring my money at home. Can you ask Jim if you can add another $1000.00.” The circumstances of this communication, coupled with other evidence uncovered in the case, demonstrate that HALBERT was asking Lyon to deliver a cash bribe payment from the District of Hawaii to HALBERT in FSM, the criminal complaint alleged.
One month before the FSM Government awarded the Project Management Unit Contract Halbert and Lyon instructed Co-Conspirator 1 to draft a request for qualification document seeking bids for the PMU contract, including drafting selection criteria to favor Lyon Associates.
On August 27, 2015, Halbert sent an email to Lyon with the subject line, “2014 Chevy Silverado,” stating, “Please get this truck. It is my cash so when I need to pay back anyone, I can sell it or this will be my ride forever. If you can, lift it 6 in and put on black rims.”
The charging document against Halbert says that Lyon admitted that in 2015 Lyon and his co-conspirators purchased an additional vehicle for Halbert’s personal use in order to obtain and retain business and shipped it to the FSM.
On September 1, 2015 Halbert sent an email to Co-Conspirator 1, asking Co-Conspirator I to talk to Lyon about loaning HALBERT $2,500 to open an account, stating, “ We will return it once we get compensation, maybe profit if he is nice.”
On November 15, 2015, Halbert sent an email to an unnamed executive at Lyon Associates asking for the company to book and pay for a hotel room for Halbert and his family for a trip to Guam. The executive denied the request by email saying that at that time, Lyon was approving “only project reimbursable travel requests.”
On November 16, 2015 Halbert emailed three Lyon Associates employees. “This is to inform you that I am closing your office starting tomorrow until further notice. You can email [another Lyon executive] and Co-Conspirator 1 and inform him of this direction,” the email said.
On the next day, Halbert sent an email to the Lyon Associates executive saying, ““ I’ m greatly offended and hope this is the last time you will contact me. You have no business talking as you don’t understand and appreciate how Lyon got this job...You’ re very disrespectful and insulting. For this, Lyon will never get another job in the FSM. I can make that happen.”
In December of 2015, Halbert entered into a Deferred Prosecution Agreement (DPA) with the FSM for falsifying his educational credentials. The falsified credentials meant that Halbert received a substantially higher salary for his position than he was qualified to receive. The DPA required Halbert to pay restitution to the FSM government.
On October 10, before the DPA was reached, Halbert sent an email to Lyon asking Lyon to “still help me with $40k.”
On December 22, 2015 he wrote an email to Co-Conspirator 1 with the subject line, “Restitution” saying, “Please ask Jim if he can give me the whole and I will put it down in full to lower the monthly.” Co-Conspirator 1 wrote back saying that he had asked but “they don’t have money now. They are short of money all the time.” Halbert wrote back to Co-Conspirator 1 saying, “I’m shocked…really thought they committed to help. Now I just lost all my confidence.” Co-Conspirator 1 wrote back saying, “They will help you by monthly.”
On March 21, 2016, Halbert sent an email to Lyon, “You don’t think people in the Government questions why I have a long term contract with Lyon? You don’t understand how hard I work from my side to protect you and your contract.”
On March 31, 2016, Halbert sent another email to Lyon saying, ““ I’m helping you already and you paying me in some ways when I ask. I’m effective this way right?”
In the last email listed in the criminal complaint, Halbert asked to be put on Lyon’s payroll so that he could pay his restitution to the FSM more quickly. “So I will start getting paid by the Government under my contract in two weeks and I might get hired on permanently in 1 month. I want to return the whole amount of my checks and every one of them until my restitution is fully paid off. Can you put me on your payroll so I have some money every month? Let me know your thought.”
According to news sources in Hawaii, the US District Court released Halbert on bail at a hearing on February 14. He was required to surrender his passport. The preliminary hearing on the charges is scheduled for February 23, 2019.