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.

Two Service Members Charged With Distributing Narcotics To Overdose Victim At Electric Zoo Music Festival In 2018

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrests of LAGARIA SLAUGHTER and TANNER HOWELL, both of whom are service members stationed at a base in New York State, and the unsealing of a Complaint charging SLAUGHTER and HOWELL with distributing Molly on September 1, 2018, to a young woman attending the Electric Zoo music festival in New York, who subsequently died of a drug overdose.  The Complaint also charges SLAUGHTER with conspiring to distribute Molly and LSD between May 2018 and March 2019.  SLAUGHTER and HOWELL were arrested this morning and will be presented later today in federal court in Manhattan before U.S. Magistrate Judge Sarah L. Cave.

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Lagaria Slaughter and Tanner Howell supplied the dangerous drug Molly to a young concert-goer, who overdosed and died after using Molly and other drugs.  Tragically, this is not the first time my Office has charged people in connection with the overdose death of a concert-goer at the Electric Zoo festival.  Today’s arrests should serve as a dual-purpose reminder:  To those who peddle dangerous and potentially lethal drugs, this Office and the NYPD are committed to apprehending and prosecuting you.  To prospective users of these drugs, there is nothing ‘recreational’ about drugs that can kill you.”

NYPD Commissioner Dermot Shea said:  “The NYPD is committed to bringing those who commit these acts to justice. I commend the members of the Detective Borough Bronx Overdose Squad, the U.S. Attorney’s Office for the Southern District, and the FBI, who dedicated themselves to help move this case forward.”

According to the allegations in the Complaint[1]:

On September 1, 2018, a young woman (“Victim-1”) began experiencing the effects of a drug overdose after using drugs while attending the Electric Zoo music festival (the “Festival”) on Randall’s Island in Manhattan.  Victim-1 died on September 3, 2018, after being treated for the overdose at a hospital in Manhattan.  Following an investigation by the NYPD, law enforcement identified SLAUGHTER and HOWELL, both members of the U.S. military stationed at a base located in New York State (the “Base”), as individuals who distributed Molly (3,4-methyl​enedioxy​methamphetamine) to Victim-1 on September 1, 2018, while she was attending the Festival and shortly before she fatally overdosed.  Medical records show that Victim-1’s death was caused by acute intoxication from the combined effects of multiple drugs, including Molly.

Days earlier, SLAUGHTER had organized a trip to New York City with other service members to attend the Festival.  At that time, SLAUGHTER was involved in trafficking both Molly and LSD (lysergic acid diethylamide).  From May 2018 to March 2019, SLAUGHTER worked with others to sell Molly and LSD to customers on and off the Base.  While in New York City for the Festival, SLAUGHTER and another individual met HOWELL at a nightclub.  HOWELL told SLAUGHTER that he was going to the Festival the following day with a large group of friends and they wanted to buy Molly to take while at the Festival.  SLAUGHTER agreed to supply the Molly for distribution to the group.  The following day, September 1, 2018, HOWELL arranged to purchase 57 capsules of Molly from SLAUGHTER, at a total price of $560.  SLAUGHTER and another individual traveled to the Festival to sell the Molly.  HOWELL had two female members of his group – Victim-1 and her friend – meet SLAUGHTER and the other individual outside the concert entrance to retrieve the Molly to be used by the group.  HOWELL paid for the Molly via electronic payment, and SLAUGHTER provided the 57 capsules of Molly to Victim-1 and her friend.  Upon completion of the transaction, Victim-1 and her friend entered the Festival with the Molly.  Victim-1 overdosed later that day and died two days later.

On April 24, 2019, law enforcement searched SLAUGHTER’s barracks at the Base.  Law enforcement recovered, among other things, approximately 10 capsules of Molly, 55 doses of LSD, and drug packaging materials.  Text messages recovered from SLAUGHTER’s cellphone show SLAUGHTER offering to sell hundreds of capsules of Molly to other service members on the Base.

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SLAUGHTER, 25, of Jefferson County, New York, is charged with one count of conspiring to distribute Molly and LSD, and one count of distributing and possessing with intent to distribute Molly.  Both counts carry a maximum sentence of 20 years in prison.

HOWELL, 22, of Jefferson County, New York, is charged with one count of distributing and possessing with intent to distribute Molly, which carries a maximum sentence of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.

Mr. Berman praised the outstanding investigative work of the NYPD.

This case is being handled by the Office’s Narcotics Unit.  Assistant United States Attorneys Dominic A. Gentile and Peter J. Davis are in charge of the prosecution.

The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.