Even though their paychecks bounced and the company that employed them is in bankruptcy, private security guards continue to work at federal facilities around San Diego.
"We kept all these buildings open," said Robert Nowosielski, president of the union chapter representing 112 guards in San Diego.
The guards had worked for USProtect Inc. Nowosielski said he hopes the company that picked up the contract, Paragon Systems Inc., will help workers with back pay.
"I have a $1,600 check that's worthless," he said.
The bankruptcy proceedings follow a company executive's admission that he bribed a federal official to obtain the security-guard contract.
Nowosielski's union, Local 52 of the United Government Security Officers of America, has tussled with USProtect in the past: once over the cancellation of a contract at buildings at border crossings, and another time over back pay.
But when paychecks started bouncing, Nowosielski said he knew "there's something dirty here somewhere."
USProtect collected more than $180 million in federal contracts since 2000 by providing guards at federal courthouses, Social Security offices and the Walter Reed Army Institute of Research.
Its guards worked at the federal building in downtown San Diego, but not at the adjacent federal courthouse.
Federal prosecutors say USProtect shouldn't have received the $50 million San Diego contract in the first place because it was outbid by another company by more than $10 million.
USProtect's founder, Michael Holiday, 50, of Silver Spring, Md., said in a plea agreement that he gave thousands of dollars in cash to a federal official and paid for a Caribbean cruise in exchange for the contract guarding federal buildings in San Diego and nearby counties.
Holiday told federal agents of the fraud after he was caught sending child pornography to an undercover officer in an Internet sting.
He now faces 20 years in prison, as does Dessie Nelson, 65, of Oakland, the San Francisco-based official of the General Services Administration who admitted bypassing cheaper bids in order to give USProtect the contract.
A message on the main number for USProtect's Maryland headquarters said the company ceased operations Monday.
The company entered bankruptcy proceedings Sunday after federal prosecutors in Baltimore moved to seize $6.9 million, two Florida homes and a boat from executives who pleaded guilty to bribery and other charges.
Wachovia Bank, which said it was owed $15.2 million by the company, filed the bankruptcy petition after recalling loans and refusing to honor payroll checks for lack of funds.
In a court filing Monday, Wachovia said that Lisa Hudec, USProtect's owner, took out more than $4.8 million in loans and paid herself more than $5 million in salary in the first nine months of 2007, compared with $384,615 in the same period in 2006.
Efforts to reach Hudec were unsuccessful. In its filing, Wachovia said she was sick at home.
Her husband, USProtect's former chief operational officer, Richard Hudec, pleaded guilty in November to tax evasion and lying to the federal government when he failed to disclose prior convictions. He faces five years in prison at a sentencing scheduled for March 31.