Wednesday, January 01, 2020

School Owner Pleads Guilty to Defrauding Department of Veterans Affairs Program Dedicated to Rehabilitating Disabled Military Veterans

The owner of a physical security school pleaded guilty today to defrauding a U.S. Department of Veterans Affairs (VA) program dedicated to rehabilitating military veterans with disabilities.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jessie K. Liu for the District of Columbia, Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office and Special Agent in Charge Kim Lampkins of the VA Office of Inspector General (OIG), Mid-Atlantic Field Office made the announcement.

Francis Engles, 63, of Bowie, Maryland, pleaded guilty to one count of wire fraud.  The plea was entered before U.S. District Judge John D. Bates of the District of Columbia.  Sentencing has been scheduled for April 2, 2020.

According to admissions made in connection with Engles’s guilty plea, Engles was the owner and operator of Engles Security Training School (Engles Security).  In August 2015, Engles Security became an approved vendor of the VA’s Vocational Rehabilitation & Employment (VR&E) program, which provides disabled U.S. military veterans with services.  Thereafter, Engles Security obtained over 80 percent of its total revenue from the VA in exchange for purporting to provide certain courses to disabled military veterans.

To further the scheme, Engles falsely represented to the VA that he was providing veterans with months-long courses for 40 hours per week and over 600 total hours.  In fact, Engles Security offered veterans far less than what Engles represented to the VA.  In some instances, he offered only a few hours of class per day for several weeks.  Some veterans did not attend more than one day of class.  Engles nevertheless sent to the VA “Certificates of Training” stating that veterans had completed courses that they had not completed or, in some instances, had not taken at all.  Similarly, Engles submitted letters to the VA falsely stating that the veterans were employed by Engles’s private security business.  Engles also instructed veterans to sign attendance sheets for classes that they did not in fact attend.  In total, Engles obtained $337,960 from the VA for the purported education of veterans.

Engles also attempted to obstruct the investigation into his fraud.  During an interview with federal agents, Engles lied about veteran students’ attendance at the school, among other things.  Later, when Engles Security was served with a grand jury subpoena, Engles prevented his employee from producing responsive documents that she had gathered.  Some of these documents were later discovered in the government’s search of Engles Security’s office.

In February 2019, four other individuals were sentenced in related cases following their guilty pleas.  James King, a former VA employee, was sentenced to serve 11 years in prison for committing bribery, defrauding the VA, and obstructing justice.  Albert Poawui, the owner of Atius Technology Institute, was sentenced to serve 84 months in prison for committing bribery.  Sombo Kanneh, Poawui’s employee, was sentenced to serve 20 months in prison for conspiracy to commit bribery.  Michelle Stevens, the owner of Eelon Training School, was sentenced to serve 30 months in prison for committing bribery.

The FBI’s Washington Field Office and the VA Office of Inspector General are investigating the case.  Trial Attorneys Simon J. Cataldo and Victor R. Salgado of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Peter Lallas of the U.S. Attorney’s Office for the District of Columbia are prosecuting the case.

Government Contractor Charged in Scheme to Defraud U.S. Department of Veterans Affairs

Defendant Received “Kickbacks” as Part of Conspiracy

Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that Dale Johnson, 57, of Anchorage, has been charged with one count of conspiracy for his role in a scheme to defraud the U.S. Department of Veterans Affairs (VA) into issuing Service-Disabled Veteran-Owned Small Business (SDVOSB) government “set-aside” contracts to unqualified private contractors.  A plea agreement has also been filed in this case, and Johnson is currently awaiting his Change of Plea hearing to be scheduled.

Johnson’s co-conspirators, Richard Vaughan, 72, and Donald Garner, 47, have been charged in a separate 31-count indictment with bribery and wire fraud charges in connection with the scheme.

Vaughan was a VA contract officer representative and was responsible for awarding and managing numerous contracts awarded by the VA, including certain SDVOSB “set-aside” contracts.  Johnson was the owner of ADALECO General LLC, and Garner was the owner of Veteran Ability, which were both government contractors that provided various services to the U.S. government, including the VA in Anchorage.

The United States Small Business Administration (SBA) is an independent agency of the federal government responsible for aiding, counseling, assisting and protecting the interests of small business concerns.  The SBA and VA administered a program to award SDVOSB “set-aside” contracts, which could only be awarded to small business concerns owned and controlled by qualified Service-Disabled Veterans (SDVs).

In October 2014, ADALECO had an SDVOSB certification, while Veteran Ability did not.  According to court documents, Johnson falsely certified to the VA that his company ADALECO would perform a majority of the work on a snow removal contract awarded in October 2014, which was a “set-aside” contract for a certified SDVOSB contractor.  The investigation revealed, however, that it was actually Garner and Veteran Ability, along with other non-SDVOSB companies, who performed 100% of the work under the snow removal contract.  Johnson received 5-10% of every payment under the contract as a “kickback” for allowing Garner to use ADALECO’s SDVOSB certification, which amounted to approximately $54,302.  Johnson also made other misrepresentations to the VA in furtherance of the fraudulent scheme.

The Federal Bureau of Investigation (FBI), the U.S. Department of Veterans Affairs Office of the Inspector General, Small Business Administration Office of the Inspector General, and General Services Administration Office of the Inspector General, conducted the investigation leading to the charges in this case.  This case is being prosecuted by Assistant U.S. Attorneys Ryan D. Tansey and Kyle Reardon.

The charges against Johnson are merely allegations, and he is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.