Out From the Shadows

Special Forces’ $77M ‘Hustler’ Hits Back

First he worked for U.S. commandos. Then he made millions. Then the American government seized his money. Now, for the first time, Hikmatullah Shadman is publicly fighting back.

12.08.14 10:59 AM ET

Hikmatullah Shadman started working for American Special Forces teams in 2002 after the invasion that toppled the Taliban. Shadman’s father, a teacher, fled Kandahar during the Taliban’s rule, but returned to resume his career. He urged his son to help the Special Forces teams working in the area.

“My father told me these people are here to help,” Shadman said about the Special Forces. “These people are helping us, so let’s help them.”

Shadman started as a laborer, but within a year became an interpreter because he could speak English. After several close calls on missions in southern Afghanistan, some of the Special Forces soldiers urged Shadman, who they nicknamed “Hik,” to find a safer business. Shadman opened Hikmat Shadman Logistics Serves Company (HSLSC) and won contracts to provide logistical support to the Special Forces teams, earning the trust of the Special Operations taskforce working in southern Afghanistan. That trust eventually earned him a lucrative “sole source” contract to provide supplies and logistical support to the network of Special Forces bases in southern Afghanistan.

His contract and earnings drew the attention of the Office of the Special Inspector General for Afghanistan Reconstruction, or SIGAR, which saw Shadman’s wealth and exclusive contract as red flags for corruption, his lawyer said.

In 2012, SIGAR investigators with agents from the Air Force Office of Special Investigations raided Shadman’s compound and arrested him. Later, the U.S. government seized more than $63 million from Shadman, alleging he defrauded the U.S. of more than $77 million by bribing contractors and charging inflated prices for trucking contracts to deliver U.S. military supplies.

This is the first time that Shadman has talked publicly about his case. He said he has been wrongly accused of defrauding the U.S. government. He risked his and his family’s lives by helping Special Forces because the Taliban targeted anyone even suspected of cooperating with the U.S. military, especially translators.

“I grew up with Special Forces,” Shadman said during a telephone interview Wednesday. “I call them my family. America is saying I cheated my family.”

While his reputation has been tarnished, Shadman is pushing back. He spent more than $100,000 to fight the allegations. Twice he has been cleared of wrongdoing—first by a military tribunal and then the Afghan courts. Now living in Kabul, Shadman is still waiting to be cleared by SIGAR, which hasn’t presented any evidence supporting its allegations in court and the government is asking to stay the case a third time to continue its investigation.

There is no doubt Shadman used his contacts to start a very lucrative business providing services to Special Forces units. But his supporters argue Shadman’s business practices were above board. And now, Shadman is finding help with some of the Special Force soldiers who depended on him so many times in villages across the war-torn nation. They are vouching for Shadman, saying he is a scapegoat of a shoddy investigation.

“All the evidence we have shows this case is false,” said Bryant Banes, Shadman’s American attorney. “The government has blocked every opportunity to challenge this case on its merits.”

Banes said SIGAR is violating due process by seizing property on a mere allegation, blocking Shadman’s access to evidence for years, and then staying the case multiple times as they continue to investigate in hopes of finding solid evidence. It’s a “new frontier of civil forfeiture,” Banes added. The agency has kept Shadman’s case in court based solely upon its complaint, and not the merits of the case.

SIGAR declined to discuss the matter.

“Unfortunately as this is an ongoing issue, we cannot comment,” said Alex Bronstein-Moffly, acting director of public affairs.

Congress created SIGAR to provide oversight of relief and reconstruction projects in Afghanistan. The U.S. has spent approximately $120 billion to rebuild the central Asian nation, according to SIGAR. The organization’s investigations have added up to about $500 million in savings, according to SIGAR’s October 2014 quarterly report to Congress.

SIGAR has been very aggressive in exposing wasted taxpayer money, massive development failures, and numerous cases of fraud and corruption. For instance, investigators uncovered the $661.3 million Afghan Mobile Strike Force Vehicles program that lacked spare parts and training, a $486 million purchase of 20 transport planes for the Afghan Air Force that were never used and eventually scrapped for pennies on the dollar, and more than 460,000 missing rifles given to the Afghan National Army. In it latest report to Congress, SIGAR says it suspended 44 individuals and 13 companies for fraud and poor contract performance for a savings of $398 million.

Shadman’s case centers on alleged bribes to officials at TOIFOR Global Life Support Services, a Hungarian company that provided logistical support for coalition forces at Kandahar Airfield. The government argues Shadman bribed the officials to gain transport contracts, according to a complaint filed with the U.S. District Court for the District of Columbia in 2012.

Bryan Myers, a sergeant first class in the Special Forces who worked with Shadman in Afghanistan, said SIGAR’s allegations, plus new allegations of fuel theft were investigated by the military in 2011 and Shadman was cleared.

“These issues were fully investigated at the time, Hik was exonerated, and the perpetrators identified, and proper corrective actions were taken,” Myers said in his statement.

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It is unclear whom the perpetrators were or what actions were taken. According to Myers’ statement, the findings of the investigation are listed as classified Special Operations Command and International Security Assistance reports.

Myers said in his statement that some of the issues may have come from an impersonator who claimed to be Shadman. Myers and other Special Forces soldiers carried a picture of the “fake Hik” to make sure investigators and others were talking about the same person.

“Everything we look at was straight, EVERYTHING!” Myers said in his statement. “This also included a full polygraph in which I had the examiner specifically ask him financial, theft, and fraud-related questions concerning his… work for the U.S. Special Forces.”

Mike Woodall, a captain in the Special Forces, oversaw the logistics branch for the U.S. Army Special Operations Task Force South from August 2010 to April 2011. He helped approve Shadman’s sole-source contract, according to his October 2014 sworn statement.

At the time, the Special Forces were pushing into Afghan villages previously unoccupied by coalition forces. The units were building bases from scratch, and Shadman’s trucks were able to move supplies to these villages in a timely manner, according to Woodall.

“We used the sole source granted to HSLSC for a number of our operations because they required a level of trust and dependability that only Mr. Shadman could provide,” Woodall said.

Just before the investigation started, Shadman applied for a visa after the Taliban twice tried to assassinate him with IEDs. Five Special Forces soldiers wrote glowing recommendations. All of the letters vouched for Shadman’s integrity.

But support from the Special Forces task force didn’t stop SIGAR investigators from raiding Shadman’s compound and arresting him. Shadman was detained for 77 days before being released after a U.S. Military Tribunal in 2012 found no wrongdoing.

SIGAR continued to pursue the case, however. In November 2012, a U.S. judge issued warrants for more than $70 million in Shadman’s bank accounts in Afghanistan. The Afghan government froze two of Shadman’s accounts in January 2013 after receiving the warrant. The Afghans released the accounts a few months later after they found no wrongdoing. That ruling was affirmed in a final judgment by the Afghan courts, which the Afghan Supreme Court confirmed in 2013.

Shadman transferred millions to banks outside Afghanistan in 2013 to buy property to open a business in Dubai, according to Banes.

The transfers prompted SIGAR to file an amended complaint in May 2013 to get warrants seizing the funds from interbank accounts in eight New York banks. The Patriot Act allows the Department of Justice to seize foreign bank assets in U.S. accounts. SIGAR was able to secure $53 million, according to Banes.

“We are determined to use all possible means to recover stolen taxpayer money,” said Special Inspector General for Afghanistan Reconstruction John F. Sopko said in a statement last year. “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.”

The seizures were the first time SIGAR investigators seized funds held in an Afghan bank. Bane said this is the real reason for SIGAR reluctance to let the Shadman case go.

“What they are really doing is justifying their existence,” Banes said. “If they lose Shadman’s case, it will show they aren’t effective.”

For Shadman, it is a waiting game. He still doesn’t understand the delay and just wants his day in court so that he can prove his innocence. Despite the case, he still supports the Special Forces and what the Americans did for his country.

He has no regrets.

“Special Forces helped my country,” he said. “I know what I want for my country is what they are doing for my country.”