For the first time, the Department of Justice has frozen an Afghan contractor account and is now attempting to seize tens of million of U.S. taxpayer dollars obtained illegally by those contractors working for the military in Afghanistan.
A three-year investigation by the Special Inspector General for Afghanistan Reconstruction revealed that Afghan trucking contractor Hikmatullah Shadman had stolen $77 million in U.S. government funds by charging inflated prices to the U.S. military for supply transport. Shadman was able to win contracts through rigged bids, bribery and kickbacks.
SIGAR identified $63 million of the $77 million Shadman illegally obtained at banks in Afghanistan and around the world. Right now, the Department of Justice is attempting to seize the funds, SIGAR said in a report announcing its successful investigation.
"We are determined to use all possible means to recover stolen taxpayer money," SIGAR chief John Sopko said in a statement. "I'm proud of my agents, who worked closely with the Department of Justice on this groundbreaking achievement. This hits the criminals where it hurts. SIGAR will stop at nothing to follow this money trail wherever it leads."
SIGAR and the Government Accountability Office have identified hundreds of millions of dollars that were obtained by contractors through fraudulent means. What makes this investigation stand out from previous ones is that SIGAR's investigation prompted the Justice Department to take action.
IF DOJ is successful, it sets an important new precedent: U.S. money obtained illegally can now be taken back. This would allow the United States to recoup the portion of the $650 billion unlawfully spent in Afghanistan.
So far, $10.1 million has been removed from Shadman’s account.
A review of SIGAR's investigation shows just how challenging it is to identify and trace illegal activity in Afghanistan.
SIGAR began to look into Shadman's actions in 2010. It determined that he had illegally obtained contracts for 5,421 transportation resupply jobs.
After concluding its investigation, a U.S. federal judge issued a warrant to seize $77 million. These warrants were then sent to Afghanistan, which has agreed to follow the United Nationals Convention Against Corruption.
In January 2013, the Afghan government froze two of Shadman's bank accounts at Afghanistan International Bank. But sometime after that, the freeze was lifted and in March Shadman managed to transfer money to Bank Alfalah and Emirates NBD Bank in the United Arab Emirates. The Attorney General of Afghanistan then told U.S. authorities they no longer recognized the freeze request.
In May, a U.S. court issued another warrant for the funds Shadman has moved. They have yet to recover the rest.