By Ruben Castaneda
Washington Post Staff Writer
Thursday, October 4, 2007
The former owner and chief executive of a Silver Spring company admitted in federal court yesterday that he bribed a government contracting official with cash and paid for her passage on a Caribbean cruise in exchange for contracts to provide security at federal buildings in Maryland and California worth more than $130 million.
Michael B. Holiday, 50, of Silver Spring, a former Montgomery County police officer, gave the official $35,000 stuffed in a shopping bag and another $10,000 in an envelope, according to a factual summary that Holiday acknowledged was accurate. He pleaded guilty to bribery and tax evasion in U.S. District Court in Greenbelt.
U.S. Attorney Rod J. Rosenstein said that, as measured by the value of the contracts secured through bribery, it is the largest public corruption case ever prosecuted in Maryland.
"Government employees are given broad discretion about how to spend taxpayer money," Rosenstein said in an interview. "Their decisions must be based on which contractor provides the best service to the public at the lowest price, not on which contractor offers the best bribe to the employee at the highest price."
Holiday's company, Holiday International Security, which changed its name to USProtect after Holiday sold it in 2003, has provided armed and unarmed security guards for 18 federal agencies at 120 installations in 32 states and territories, Rosenstein's office said.
Criminal charges were also filed yesterday against Dessie Ruth Nelson, the former General Services Administration contracting official Holiday said he bribed. Charging documents allege that Nelson, 65, of Oakland, Calif., accepted more than $100,000 in bribes from Holiday and evaded taxes on the bribe payments.
Another former official with the security company, Richard S. Hudec, 44, of Naples, Fla., was charged yesterday with tax evasion and improperly concealing material information from federal contracting officials, including prior convictions for felony fraud, in connection with contracts worth more than $150 million.
U.S. District Judge Deborah K. Chasanow scheduled Holiday's sentencing for Jan. 23. Holiday remains free under the supervision of federal pre-trial services officials, said Bruce V. Marcus, Holiday's attorney.
"Other than the unfortunate circumstances surrounding his business, Mr. Holiday is a well-respected individual," Marcus said.
According to a Montgomery County police spokeswoman, Holiday was an officer with the department from 1980 until he resigned in 1992. Marcus said Holiday had a "stellar" record as a police officer.
In addition to bribery and tax evasion, Holiday pleaded guilty to transporting child pornography by computer.
In April 2004, an undercover FBI agent, as part of an investigation into child pornography, entered an Internet chat site called "Special Interests -- daddy we shouldnt," according to the factual summary. In the chat room, the agent sent a message: "room topic vids to trade."
That afternoon, Holiday sent the agent a computer message offering to trade videos. Holiday later sent the agent an e-mail with an attached video file that showed a prepubescent girl performing oral sex on an adult man, according to the summary, which Holiday signed.
The tax evasion charge stems from Holiday's admitted failure to file federal income tax returns each year from 2001 to 2004. According to the summary, he received "substantial compensation" from the security firm during that time and failed to pay more than $400,000 in federal taxes,
The summary says that Nelson twice awarded Holiday's company contracts for work in California in instances in which it was not the lowest bidder, once in 2000 and once the following year. In 2002, Nelson helped the company win a contract to provide security at Social Security Administration facilities in Baltimore, the summary said.
Efforts to reach Nelson and Hudec yesterday were not successful. Nelson's home phone number in Oakland is not listed, and there is no listing for Hudec in Naples. Messages left seeking comment from their attorneys were not immediately returned.
According to the complaint against Hudec, the company changed its name after it was purchased by Hudec's wife. Company filings to federal agencies falsely certified that neither it nor its principals had prior criminal and civil fraud judgments.
Rosenstein announced the plea agreement and charges at a news conference in Greenbelt. In the interview, he said the cash-stuffed shopping bag and envelope "really demonstrate the egregious nature of this scheme."