Wednesday, July 31, 2019

Another "Rent-a-Vet" Scheme Discovered

In the context of Government contracting, "Rent-a-Vet" schemes are those contractors who certify that they are owned and controlled by a service-disabled veteran when they are not. The incentive to deceive is monetary - companies owned and controlled by non-service-disabled obtaining contracts that are set aside for companies that are owned by service-disabled veterans. These contracts are often thought to be lucrative since there are fewer qualified bidders but Congress knew that might be the outcome when they passed enabling legislation.

The Justice Department has prosecuted many contractors posing as service-disabled veteran owed and surprisingly, it still happens. Its got to be one of the easiest crime to uncover and prosecute. There are too many interested parties willing to blow the whistle. For one, employees know who is really running operations and some see a big payday in their futures through whistleblower actions. Competitors also know who is and is not a service-disabled veteran and a couple of bid opportunities lost to non-qualified contractor will send them to the Hotline. Government employees quickly catch on who is really in charge of a project. Contract administration, inspectors, and other oversight agencies soon catch on who is really controlling the company.

The Justice Department just announced a civil settlement reached with a New Jersey company who posed as a service-disabled veteran and was awarded millions of dollars in Government contracts. The settlement against the company's owner, Daniel Hernandez, and the company Regiment Construction Corporation, was for $2.4 million. Hernandez improperly represented that Regiment was eligible to bid on contracts set aside for companies owned and controlled by service-disabled veterans when in fact, Hernandez was not a veteran and the veteran to whom ownership and control was attributed had no ownership or control of the company.

The Justice Department press release announcing this settlement can be accessed here.

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