A Sugar Land business owner who won $55 million from city and county contracts over the last several years pleaded guilty Monday to committing fraud against an unrelated private company, federal prosecutors said.
Sudhakar Kalaga, 56, admitted to submitting fake bids from non-existent companies to a Houston manufacturing company between 2010 and 2019 in order to ensure that construction and maintenance bids from his engineering firm, KIT Professionals, appeared to be the lowest, according to U.S. Attorney Alamdar S. Hamdani’s office.
Kalaga then paid millions back to the manufacturing company’s facilities manager after KIT won the contracts, the attorney’s office said. Neither the company nor its facilities manager were named in federal court filings.
While the investigation into Kalaga only centered around his dealings with the private company, the Sugar Land businessman has also won $55 million in government contracts since 2008, the majority from the city of Houston, and was still engaged in dozens of contracts with the city when he was charged in January.
City Attorney Arturo Michel said in February that the city was working to identify its contracts with KIT Professionals to remove them from ongoing work. Kalaga’s attorney, Rusty Hardin, has said that Kalaga, who stepped down as president of the company after the charges came in, has never been accused of improprieties in his government dealings.
Kalaga has also donated tens of thousands of dollars to city and county officials since 2007.
“He has always accepted full responsibility for what’s happened, immediately separated himself from the company when these charges were filed, and there is no suggestion that any of the city contracts or any government contracts were an issue at all,” Hardin said in February.
Kalaga will be sentenced for conspiring to commit mail fraud before U.S. District Judge Lee Rosenthal on June 20. He faces up to five years in federal prison and $250,000 in fines.
With previous reporting by Mike Morris and Yilun Cheng.
sam.kelly@houstonchronicle.com
