Prominent contractor pleads guilty

Officials: Kalaga committed fraud to secure work for firm in yearslong bribery scheme

A Sugar Land business owner who has earned at least $55 million from local government work has pleaded guilty to conspiring to commit mail fraud in a yearslong bribery scheme to obtain contracts from another company.

Sudhakar Kalaga, 56, and founder of engineering firm KIT

Professionals, admitted to submitting fake bids from nonexistent construction companies to make his firm’s bids appear lower, according to an announcement by the U.S. Attorney’s Office of Southern District of Texas. Kalaga also acknowledged he paid millions of dollars to a manager of the victim company, Toshiba International Corporation, for participating in the scheme, which took place from 2010 to 2019. The manager since has died, according to court documents.

“The victim company would not have paid Kalaga’s companies’ invoices had it known about the falsified bids or the kickback payments,” the announcement said.

While the case is only related to Kalaga’s effort to unlawfully secure contracts in the private sector, records show he has been a long-time city and county contractor and has donated heavily to local politicians.

From 2008 to 2022, KIT Professionals has received at least $50 million in payments from the city of Houston under 152 contracts, mostly as an engineering subcontractor, but also as a prime contractor on several occasions, and still is engaged on dozens of active contracts, according to city records.

Kalaga and his wife, who also is affiliated with KIT Professionals, contributed $93,550 to 25 city candidates from 2007 through 2019. Mayor Sylvester Turner is on the top of the list, and has received $25,000, plus $2,000 to help fund his 2016 inauguration events.

City Attorney Arturo Michel last month said the city was in the process of identifying open contracts involving KIT Professionals and removing the firm from ongoing work.

The company also made $5 million from Harris County contracts from 2017 to 2023, according to information provided by the Harris County Auditor’s Office. The most recent payment occurred Jan. 31, two weeks after Kalaga was charged with conspiracy.

In 2020 and 2021, the Kalagas contributed $14,500 to the four Harris County commissioners, and the company was awarded 10 engineering contracts worth more than $4 million during the same time period. Three other KIT employees contributed $10,500 to the four commissioners during those two years.

After the Chronicle’s initial reporting on the case, Precinct 2 Commissioner Adrian Garcia introduced last month a proposal for the county attorney to develop a debarment policy for vendors. The court approved the motion unanimously.

“We don’t have a set policy,” Garcia said during the Commissioners Court meeting Feb. 21. “I think things have happened in many different ways. This is really to understand just how we are going to approach this issue if it were to happen again.”

Kalaga’s attorney Rusty Hardin previously said his client had taken responsibility for his actions and had separated himself from the company when the charges were filed.

Kalaga now faces up to five years in federal prison and a possible $250,000 maximum fine. His sentencing is scheduled for June 20.