A Washington businessman accused of "laundering" $130,000 used to bribe employees of the General Services Administration, surprised prosecutors today by agreeing to cooperate with their investigation of corruption within the government's massive housekeeping agency.
Robert D. Keegan, 57, the owner of Keegan's Appliances, 4584 MacArthur Blvd. NW, pleaded guilty today in U.S. District Court here to a charge of conspiracy to defraud the United States.
Prosecutors Daniel M. Clements and Elizabeth H. Trimble said they were prepared for a week-long trial, expected to begin today, when Keegan suddenly decided to sign a plea agreement this morning. Keegan was indicted five months ago.
In exchange for Keegan's truthful cooperation and the fuilty plea, the prosecutors said they will recommend that Keegan serve 30 days in jail and 60 days on a work release program when he is sentenced. The maximum penalty for the offensive is five years in prison and a $10,000 fine.
Clements told Judge Edward S. Northrop that if the case had gone to trial, he would have proved that Keegan "acted as a money launderer" for an office supply firm heavily involved in the GSA bribery scandal.
Keegan took a 3 percent cut of the money as his own share for supplying the cash for the bribes, Clements said.
Northrop asked Keegan if what the prosecutor said was correct. Keegan replied softly, "yes sir."
The cash bribes were paid out to GAS store managers and assistant store managers in 1976 and 1977 by officers of James Hilles Associates, an office supply firm located in Westminster. When the two officers of Hilles pleaded guilty to similar charges of conspiracy to defraud the United States last October, Clements said their bribery scheme cost the taxpayers more than $1.7 million in three years.
The sum represented money the GSA paid to Hilles for office supplies which were never delivered to the GSA stores. The two Hilles officers had instead paid out $1.3 million - including $130,000 in cash - worth of bribes to GSA employees to cover up the fact that supplies were not delivered, Clements said, and kept the rest as their "cost of doing business."