‘Rent A Vet’ Scheme Center Of VA Contractor Fraud Scandal
The Department of Justice recently announced another ‘rent-a-vet’ scheme was at the center of a VA contractor fraud that swindled set aside contracts intended for disabled veteran-owned small businesses. The anti-veteran scheme involved fraud, wire fraud, money laundering and conspiracy.
Using the ‘rent-a-vet’ model pioneered by previous major contractors, Ram Hingorani pled guilty to the fraud scheme. Approximately $23.5 million in contracts were improperly awarded to Hingorani’s shell company, Midwest Contracting, Inc. (MCI), instead of other legitimate Service-Disabled Veteran-Owned Small Businesses (SDVOSB).
MCI was awarded 45 federal contracts that were supposed to be awarded to SDVOSB through the government’s set aside program. Instead, Hingorani used disabled veteran Ronald Waugh to stand in as a figurehead partner in violation of current contracting laws. The Department of Justice said it will drop all charges against Waugh since the fraud scheme was utilized by Hingorani.
Here is the press release from the DOJ:
Omaha Contractor And Companies Plead Guilty To Fraud Scheme
FOR IMMEDIATE RELEASE
August 25, 2014
DES MOINES, IA – On August 22, 2014, Omaha, Nebraska contractor Ram Hingorani pled guilty to Major Program Fraud in the United States District Court for the Southern District of Iowa, announced United States Attorney Nicholas A. Klinefeldt. In addition, one of Hingorani’s companies, Midwest Paving, Inc. (MPI), pled guilty to Money Laundering in furtherance of the scheme. MPI is a U.S. General Services Administration, Department of Defense, and Department of Veteran Affairs contractor. These admissions of guilt by Hingorani follow guilty pleas entered by Midwest Contracting, Inc. (MCI), on August 15, 2014, to Major Program Fraud and Wire Fraud.
On May 22, 2013, a Federal grand jury in the Southern District of Iowa issued a 32-count Indictment charging Hingorani, business partner Ronald Waugh, MCI and MPI, in connection with an approximate $23.5 million Service-Disabled Veteran-Owned Small Business (SDVOSB) fraud scheme. The charges included multiple counts of major fraud, wire fraud, money laundering and conspiracy. Additionally, agents seized approximately $3.9 million from 14 separate financial accounts.
Beginning in May of 2007 and continuing through August of 2010, MCI unlawfully received 45 set-aside and/or sole-source SDVOSB contracts from the U.S. Department of Veterans Affairs and U.S. Department of Defense (DoD), to include contracts involving American Recovery and Reinvestment Act (ARRA) funds. The investigation revealed MCI was a pass-through and/or front company for Hingorani’s other businesses and that Waugh was simply a figurehead or “rent-a-vet,” who was being used for his SDV status. Evidence demonstrates that the non-veteran Hingorani controlled MCI and certified MCI’s SDVOSB status through the General Service Administration’s Central Contractor Registration (CCR) and Online Representations and Certifications Application (ORCA) databases. As a result of falsely certifying MCI’s status as a SDVOSB, MCI received 45 federal contracts that would have otherwise been awarded to legitimate Service-Disabled Veteran Owned Small Business Concerns.
The United States has agreed to dismiss all charges against Ronald Waugh, the service disabled veteran utilized by Hingorani to perpetrate the fraud scheme.
As a result of his plea agreement, Hingorani faces a prison term of up to 24 months and forfeiture of the profits obtained as a result of the fraud scheme. The amount of forfeiture will be determined by the District Court following a sentencing hearing which will be scheduled at a later date. In addition, Hingorani, MCI and MPI are currently suspended and face administrative debarment from obtaining future government contracts.
This case was investigated by the General Service Administration-Office of Inspector General, US Department of Veterans Affairs-Office of Inspector General, the Department of Defense-Office of Inspector General, the Small Business Administration-Office of Inspector General, and the Federal Deposit Insurance Corporation-Office of Inspector General. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Read More: https://www.disabledveterans.org/wp-content/uploads/2014/09/140909-Omaha-Contractor-and-Companies-Plead-Guilty-to-Fraud-Scheme.pdf
The bigger problem is not these “hire-a-vet-schemes” but rather the “bribe-VA Procurement Officials” variety. A Federal Contracting Officer/Contract Specialist who has the personal integrity to do his/her job in accordance with the rules and regulations could easily prevent any fraudulent scheme from happening. The investigations and prosecutions should focus on the Contracting Officers who allow fraud from happening, especially on those who blatantly break procurement laws just so contractors whom they know to be fraudulent can get a piece of the VA procurement pie. Current VA and VAOIG officials condone and cover up the lawlessness within the whole VA system so all we are doing here is an exercise in futility.
This is but a tip of the iceberg of War Profiteers since 9/11. A friend of mine has worked most of his professional life with a DOD supply and contractor group that spans a huge amount of land and rail-yards on Eastern part of city and he has mentioned “under the radar” particulars about A LOT of DOD contractors whom blatantly went above and beyond to scam $$$ at the very lives of many servicemen in Middle East. One such example was a certain type of metallic white surface coating that was to render certain parts of equipment very hard to detect with heat imaging and such and the contractor was caught using the equivalent of office “whiteout” on those metal parts and charging tons of money for something that not only did not work, but indeed cost the lives of many in the early days of Iraqi Freedom. My buddy told me that contractor, like so many before and followed, only got slaps on the hand and the war profiteers went on to obtain even more DOD contracts without any ramifications.
He was only a few years away from officially retiring then and when he wanted to report even more atrocities, he was actually told he could have his retirement and tenure made to magically disappear! This was the same time frame where it made news that the troops were not only NOT receiving proper equipment and protection to do their jobs, but also at same time the whole “body armor debacle” had erupted. Halliburton at it’s very best and they even built their world HQ in Qatar, which grants them even further protection. BasTURDS!! Also, it was that time frame of the then-named private military group DOD contracted called “Black Water” got busted and they magically changed their name and went back under the radar doing same old thing and getting better equipment than our active duty troops.
Morale of awful truths mentioned is that nothing is going to change and it seems they will not be happy unless these wars last indefinitely since they got that taste of our tax dollars upon the very lives of veterans.
How about the slid under the rug effectively scandal of Veterans not being properly buried let alone identified at the National Cemetery? Could go on and on…it ALL is about the $$$$ and they could care less about whom gets steamrolled in process.
Start of question was how do I obtain access to work for disabled owned company that I own 100%. How do u get qualified and get on list for work? I was unclear before and asked two questions..my mistake.
I’ve seen this and countless variations on the theme for at least the last two decades. Nothing new. This extends all the way into veterans hiring. There is NO fallback for this type of discrimination because: #1 Veterans are not a protected group
#2 there are no statistics kept or forwarded to the Labor Dept on veterans employment. Political patronage will ALWAYS trump veterans preference. We are the Strawman, that gets paraded out to make the the con look good…
Just this morning I received an email where the US Attorney for the Eastern District announced another case of rent-a-vet. The subject in this case has plead guilty, faces up to 5 years in jail and has already forfeited almost 3 million dollars.
My question, is how can they find out about these 5 years later and not before the contracts are awarded? It is really a shame how greedy these people are. If they gave the vet 51% ownership, they would have still made millions. It’s the old story, sheep get sheared and pigs go to the slaughterhouse.
If only they investigate RICO Act violations at BVA …. oh, they are a part of them …
That is truly sad state of affairs when a “plea of guilty” he “may” serve up to 24 months. But, when they state “all profits,” how will one know what he has left of it? You cannot bleed a turnip to paraphrase an old expression my mother use to say, and look at who truly pays for all this at a high price. The Tax Payers. That means each and every American who works hard for that dollar gets to pay out big bucks for these types of schemes allowed in the first place. Take note of the timing-people need to wake up and truly smell that “political coffee!” This is just like the many investigations regarding home health care and those that are clueless to what actually goes on. I JUST LOVED HEARING this couple I worked for ramble on regarding paying taxes and damn, “Faux Pas Views” on their television! Yet took no issue sucking off the government tit! I truly saw how they operated, I had also stated “you really need to have that HIPAA signed.” Yet, the young assistant manager who lacked knowledge stated they were waiting till they had signature pads. Well gee, it wasn’t a matter of an option I was discussing, the “LAW” was very clear regarding the grandfathering time and that was way past the midnight hour this place did not understand , ” NO, You do not get your choice regarding such matters we are talking CMS! Also, HIPAA, IT IS NOT HIPPA! Yes, those pesky details, just like you must collect a co-pay but they were not doing that. I had my fill with it, and I stated, “who often takes the fall?” It usually is one who is lower, but trained in the knowing from wrong or right! I surely wasn’t going to allow my certification be stained by such schemes! Lord, give me strength for a sticker on the side of a window that heck, who knew it would lead to political stupid as ever ignorance and then asking me to read the “self proclaimed” mother of all recognition awards as well as the “Cross” was a sign from “her God” regarding the win to keep it and those nasty Atheist didn’t win! She is not a Governor she is a quiter, a fame whore who has a following that believe her crap! ( realize when I say lower, I mean by my job designation in a two person office. However, certainly not lacking when it came to certifications.) I guess I do play by “rules.” Gee, maybe we should just all be plankton! This is where the VA shall fry. Gee, why should a “psychologist or a social worker or the other VA Whores worry or care?” I really do not like to be considered as “dumbed down” as this lying not professional had done. I do however think a remedial typing class needs to be considered? I can’t imagine she ever wrote an APA paper! I think it’s time for the NATION to see what VETERANS DEAL WITH! Don’t thank them then kill them, because of the “MEMO” I discovered! Ben, too bad we cannot compare notes. I think it would be a truly good experience for you to see what I know and what is in my possession! Keep up the work! You are doing such an awesome job, but, grandstanding political agendas I think we truly need to make this Country wake up. I guess if forced to, I certainly will be glad to show exactly how much volunteer hours, fund raising, and giving money away for the future to have real math and science teachers. I see beyond my hands, but do not ever think you can be so cunning, age and wisdom is way ahead of the game here. ( attention seeking like I am a 13 year old? Right, let me get a few Professors to educate you as in they know me?) This waste, truly sickens me. It reminds me of changing the channel and how on earth I caught a glimpse of Bush riding his bike with those who lost limbs, does he feel guilty? No, they don’t why should I? To think, I do not live that far from the moron! Thank the Heavens to know I raised children to think and be wise! I do know what a huge majority of the younger generation thinks-this country will crumble, but these kids are much wiser, smarter than one may think. ( they do not think they should support these mongrels called politicians, and stop this stupid mindset of war is the answer, is it 1960’s flashback? I so wish to share this one with one of my sons-it will be his case and point, patience they have…
I call it the “Kissinger Doctrine” wherein the political theory of: “Military men are just dumb stupid animals to be used as pawns for foreign policy” (1976) must change. My children were 9 and 3 when I was an E-6 LPO in the Navy and threatened with discharge if I stood up to fraud, waste and abuse on behalf of my subordinates. They are now 27 and 22, to include a 2 year old grand son. Yes, you are right … they know the true deal and they merit justice for their sacrifices and an entire generation has been taught, we are all just pawns under the SCOUS 1950 Feres Doctrine Rule of Law and then discarded like garbage under 38 USC 511 … @VERPA13
How do I get my LLC legally acceptable as disabled veteran Owned? Can it be jointly Native American and Disabled veteran owned at 50=50 ownership?
The ownership by the veteran MUST 51%, not 50%. The majority of the business must be owned by the disabled veteran. No exceptions.
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