Two former owners of a now-closed Missouri construction company have pleaded guilty to charges related to a “front” organization they allegedly set up to win $13.8 million in federal veterans’ set-aside construction contracts that their firm wasn’t eligible to receive, the Dept. of Justice says.
Jeffrey K. Wilson pleaded guilty on Jan. 31 in federal district court in Kansas City, Mo., to one count of government-program fraud. Paul R. Salavitch entered a guilty plea on Jan. 30 to a misdemeanor charge of making a “false writing,” DOJ said.
A Jan. 13 indictment contained eight charges against Wilson and five against both Salavitch and the construction firm, Patriot Co. Inc.
Wilson, a 53-year old non-veteran, ran operations and handled long-term decision-making for Patriot Co. from May 2005 to January 2014, DOJ said.
According to DOJ, Salavitch—a 57-year-old service-disabled veteran (SDV)—falsely certified that he was involved in Patriot’s operations and that certification allowed the company to win SDV set-aside contracts for which it wasn’t eligible.
Kathleen Fisher, a Kansas City-based attorney for Wilson, said in a Feb. 6 statement to ENR, “Regrettably, given the stage of proceedings, we are unable to provide much comment beyond what is in the public record.”
Fisher added, “I will say, however, that Patriot Co., which is no longer in operation, performed all contracted work without fail or complaint of any kind, nor is there any allegation whatsoever calling into question the value of goods and services received by the government.”
An attorney for Salavitch did not immediately respond to an ENR request for comment.
In his plea agreement, Wilson admitted that he used Salavitch’s veteran status in what DOJ termed a “rent-a-vet” plan to gain 20 federal construction contracts.
A listing in the indictment shows 19 contracts were from the Dept. of Veterans Affairs and the other from the Dept. of Defense.
The contracts were located in Missouri and 10 other states. The largest one was a $4.4-million VA contract in Oklahoma City.
In September 2013, according to the indictment, a VA inspector made an unannounced site visit to Patriot, and found that Salavitch was not there to manage the company’s day-to-day operations. Instead, he was working at his full-time job with DOD, about 40 miles away, in Leavenworth, Kans.
Two months later, Salavitch falsely certified to a Missouri state agency that Patriot was a SDV-owned small business though he knew that certification was incorrect, according to DOJ.
DOJ said sentencing hearings will be scheduled after the U.S. Probation Office completes pre-sentencing investigations.
The Justice Dept. said Wilson could be sentenced to as many as 18 months in federal prison without parole and Salavitch faces up to one year in prison without parole.
