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Businessman who tried to ‘own every dog on the track’ sentenced for conspiring to bribe VA contract specialist

The Justice Department announced in Denver last week the sentencing of a businessman who engaged in a conspiracy with a Veterans Affairs’ contracting official to manipulate contract awards to benefit a consulting company that purportedly represented service-disabled veteran owned small businesses.

Anthony Bueno was sentenced to serve 30 months in federal prison, followed by 3 years of supervised release, for his role in a conspiracy to bribe a VA official so that clients of his company would gain an unfair advantage in the VA contracting process.  Bueno was remanded into custody immediately after the sentencing hearing.

The VA’s contracting official, Dwane Nevins, previously pleaded guilty in September 2019 to every count of an indictment charging him with this scheme, including counts of conspiracy, receiving bribes, extortion, and criminal conflicts of interests.  He is scheduled to be sentenced on February 19, 2020.

According to court records:

  • Bueno and his business partner, Robert Revis, agreed to help an undercover FBI agent, who was posing as a veteran and small business owner, bribe Nevins, a contracting specialist at the VA’s Network Contracting Office in Colorado.
  • As part of the bribery scheme, Bueno and Revis, working with Nevins, agreed to submit bids from small businesses owned by veterans disabled during military service (one of whom was the undercover FBI agent) under contract with Buenon and Revis’ consulting company so that federal contracts would be set aside for only those companies.
  • As Bueno explained to the undercover agent, the conspirators would then “own all the dogs on the track,” meaning their clients were guaranteed to get the contracts.
  • Bueno, Revis and Nevins worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to the consulting company, or by asking the consulting company’s clients to pay Nevins directly for sham training classes related to federal contracting.

Robert Revis pleaded guilty in April 2019 to an Information charging him with a single count of supplementing the salary of a federal official.  His sentencing hearing is scheduled for March 2, 2020.  Bueno pleaded guilty on September 17, 2019.

Bueno has also pleaded guilty to conspiring to launder money arising from a completely separate wire fraud scheme in which he used false representations about investment opportunities to take over a million dollars from several victims.  Sentencing in that case, pending before United States District Judge William J. Martinez, is scheduled for January 23, 2019.

The case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of Inspector General, with substantial assistance from the U.S. Small Business Administration Office of Inspector General.

Source: https://www.justice.gov/usao-co/pr/businessman-sentenced-two-and-half-years-imprisonment-conspiring-bribe-veterans-affairs

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Academy provides customized instruction on small business certification to national association

The Contracting Education Academy at Georgia Tech provided four hours of intensive instruction to a group of 90 counselors on the topic of “Teaching Your Clients How To Obtain a Small Business Certification.”
Representatives of PTACs across the country attended the certification workshop.

The workshop, held in Washington, DC on Nov. 10th, was conducted as a part of the semi-annual national training conference held by the Association of Procurement Technical Assistance Centers (APTAC).  Members of APTAC work for procurement technical assistance centers (PTACs) across the country.  PTACs provide assistance to businesses — primarily small businesses — who wish to compete for government contracts.

Guest instructor and small business expert Steven J. Koprince conducted the workshop on behalf of the Academy.  He is the founder and former managing partner of Koprince Law LLC.    Earlier this year, he retired from active practice of law, but he continues to be involved in government contracting as a teacher and writer.  Koprince has served as an instructor for The Academy on previous engagements with APTAC and with the Department of Defense Education Activity (DoDEA).

Training materials included a certification handbook and a flash drive containing resources such as customizable training presentations.

The Academy’s program manager Alexis Kirksey provided an orientation to the workshop’s training resources.  Each attendee received a 100-page instruction manual on four different types of small business certifications, including fact sheets on each program, and a flash drive containing customizable PowerPoint presentations and dozens of other resource materials which PTAC counselors may use to counsel and train their clients.

The workshop’s objectives were:

  1. Learning the eligibility requirements for each small business category.
  2. Gaining insights into the preparation process for making a certification application.
  3. Identifying each of the steps of the application process.
  4. Learning how a small business can leverage certification in the federal marketplace.

The workshop provided an explanation of small business size standards, and then launched into a detailed examination of the 8(a) Business Development Program; the HUBZone Program; the Veteran-Owned and Service-Disabled Veteran-Owned Small Business Programs; and the Woman-Owned and Economically-Disadvantaged Woman-Owned Small Business Programs.

Workshop participants learned about important concepts applied by the federal government in the certification process such as unconditional ownership and direct ownership.  In order to be eligible for certification, the owners must be in charge of such activities as strategic policy-setting, day-to-day management, and overall administrative responsibility for business operations.

Workshop attendees listen carefully to instruction provided by Steven J. Koprince.

The significance of what is known as “affiliation” was also a topic of the workshop.  Affiliation exists when one business controls or has the power to control another, or when a third party controls or has the power to control both businesses. Control may arise through ownership, management, or other relationships.  If another business controls a certification applicant’s business, this may be a disqualifier for small business certification.

Attendees also learned about all of the documentation requirements associated with each type of small business certification.  In addition, the workshop addressed what is called the “presumption-of-loss” rule, which provides that if a business misrepresents its small business size or status, there is a presumption of loss to the government equal to the entire value of any contract or subcontract received as a result of the misrepresentation.

Multiple paths exist for submitting certification applications.  Workshop participants learned about self-certification within the System for Award Management, certification through the Small Business Administration’s on-line portals, and certification through the Veterans Administration.

The workshop concluded with advice PTAC counselors can give to their clients about following-up on their certification applications and how to leverage their small business certifications once granted.  Tips included the need to research both federal spending and contract forecasts, the importance of responding to Requests for Information, and the roles played by Procurement Center Representatives, Small Business Officers, and Small Business Liaison Officers.  Also discussed was the use of certification branding, teaming and joint venturing, how to keep certifications updated, and participation in outreach events.

The Academy is available to conduct this and other customized training workshops on any topic associated with government contracting.  Contact us by email at info@ContractingAcademy.gatech.edu for further information.

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VA official charged with taking bribes to help associates rig federal contracting process

Three men were arrested in Colorado on Wednesday of this week pursuant to warrants issued in connection with an indictment charging them with conspiring to pay and receive bribes in exchange for creating an opportunity to commit a fraud against the U.S.  Department of Veterans Affairs (VA). 

The defendants are also charged with paying and receiving bribes, or aiding and abetting the payment of bribes.

Dwane Nevins, a VA contracting official at the time of the alleged crimes, was separately charged in another count with extortion under color of official right and in two counts with violating the federal conflict of interest statute.

The following is alleged in the indictment:

  • Dwane Nevins — a small business specialist at the VA’s Network Contracting Office in Colorado — agreed to take bribes offered by Robert Revis, Anthony Bueno and an undercover FBI agent to help them manipulate the process for bidding on federal contracts with the VA.
  • Revis and Bueno, working with Nevins, agreed to submit fraudulent bids from service-disabled-veteran-owned small businesses under contract with their consulting company so that federal contracts would be set aside for only those companies.  As Bueno allegedly explained, they would then “own all the dogs on the track.” 
  • Nevins, Bueno and Revis worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to their consulting company, or by asking their consulting company’s clients to pay Nevins for sham training classes related to federal contracting.

The indictment also alleges that, after complaining about not being paid by Revis and Bueno for his participation in the scheme, Nevins used his official position at the VA to extort approximately $10,000 from an undercover FBI agent, telling the agent that “the train don’t go without me.  You know what I mean?  I’m the engine.  I’m the caboose.  I’m the engine room.”  Nevins also allegedly told the undercover FBI agent: “This is a business and businessmen need to get paid . . . . so I can have my Christmas, you know what I’m saying?”

The indictment alleges that the conspirators attempted to rig the process related to two particular contracts, both of which related to medical equipment and not to the construction of any VA facilities.  The first contract related to the procurement of LC bead particle embolization products by a VA hospital in Salt Lake City, and the second contract related to the procurement of durable medical equipment for VA facilities located throughout the region.

The case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of Inspector General, and the U.S. Small Business Administration Office of Inspector General.

Readers are reminded that the defendants are presumed innocent unless and until proven guilty in a court of law.

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Does ‘Kingdomware’ apply to non-VA FSS orders?

The Supreme Court’s rationale in a recent decision might compel every agency to set aside any Federal Supply Schedule order (or any other order, for that matter) valued between $3,000 and $150,000.

Supreme CourtEarlier this year, the United States Supreme Court issued its decision in Kingdomware Technologies v. United States.   As we’ve noted, this case was a monumental win for veteran-owned small businesses — it requires the Department of Veterans Affairs to set-aside solicitations for SDVOSBs or VOSBs where two or more such offerors will submit a proposal at a fair and reasonable price, even if that solicitation is issued under the Federal Supply Schedule.

A recent GAO decision suggests, however, that Kingdomware’s impact could be felt beyond the world of VA procurements.

In Aldevra, B-411752.2—Reconsideration (Oct. 5, 2016), the protester relied on Kingdomware to challenge a prior GAO decision that an agency is not required to set-aside an FSS order for small businesses. At issue in the initial protest was an Army National Guard Bureau solicitation under the FSS, seeking an ice machine/water dispenser (valued at $4300). According to Aldevra, the Small Business Act required the solicitation to be set aside for small businesses.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/does-kingdomware-apply-to-non-va-fss-orders/

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Owner of sham veteran-owned company sentenced for $100 million fraud

A Massachusetts man was sentenced last week in U.S. District Court in Boston in connection with recruiting veterans as figurehead owners of a construction company in order to receive specialized government contracts.

sdvosb-logoDavid Gorski, 51, was sentenced to 30 months in prison, one year of supervised release, and ordered to pay a fine of $1 million.  In June 2016, Gorski was found guilty by a jury following a 12-day trial of conspiring to defraud the United States by impairing the lawful governmental function of the Department of Veterans Affairs, the General Services Administration, the Army, and the Navy in the implementation and administration of the Service Disabled Veteran Owned Small Business (SDVOSB) Program.  He was also convicted of four counts of wire fraud.

The purpose of the SDVOSB program is to provide federal contracting assistance to service-disabled veterans who own small businesses by creating set-aside and sole-source acquisitions for such businesses.

In 2006, Gorski established a company, Legion Construction, Inc., after recruiting a disabled Korean War veteran to act as the company’s straw owner for the sole purpose of obtaining federal construction contracts set aside under the SDVOSB Program.  When the veteran’s health deteriorated, Gorski added a second disabled veteran, Peter Ianuzzi, to serve as the figurehead owner of Legion.  Legion acquired more than $113 million in federal contracts between 2006 and November 2010, after Gorski falsely represented to federal contracting officers that the company was owned and operated by service-disabled veterans.

In March 2010, a different SDVOSB registered a bid protest against Legion, alleging that Legion should not have been awarded a contract with the U.S. Department of Veterans Affairs at its medical center in White River Junction, VT.  The company specifically challenged Legion’s SDVOSB status, noting that it appeared that Gorski, not one of the veterans, was the person running Legion.

After retaining the services of a large Boston law firm to assist him, Gorski filed an opposition to the bid protest that contained backdated documents containing false and misleading information.  The Small Business Administration denied the bid protest based on Legion’s submission.

Gorski then began exploring ways to siphon money from Legion that would not appear as compensation exceeding the pay of the nominal veteran owner, Ianuzzi, in violation of federal regulations, including Ianuzzi “gifting” him $900,000 and establishing private bank accounts into which the company would deposit $2.5 million for Gorski’s benefit.  Before the bank accounts could be opened, however, a federal grand jury issued subpoenas to Legion and several witnesses.

Source: https://www.justice.gov/usao-ma/pr/owner-sham-veteran-owned-company-sentenced-100-million-fraud

 

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