Updated: 4:25 p.m. Monday, April 2, 2012 | Posted: 8:33 p.m. Saturday, March 31, 2012
By Tom Beyerlein and Andrew J. Tobias
BAMKO LLC, of Cincinnati, has received disabled-vet construction contracts worth about $18 million since forming in 2007. That includes an ongoing $2.5 million renovation contract for the U.S. Army Corps of Engineers at WPAFB. The VA earlier this month recommended indefinitely banning BAMKO from working for the federal government, alleging its owners, funeral director and veteran James C. Battle III and Evans Nwanko, president of Megen Construction, misrepresented BAMKO as a veteran-owned business.
Chevron Construction Services, of Mason, received disabled vet contracts worth a minimum of $2.3 million in disabled veteran contracts in Ohio and Kentucky. Owners Michael Clare, of Oakwood, a veteran, and businessman Majid Samarghandi, of Mason, face a four-year ban from obtaining federal contracts after the Small Business Administration ruled that Samarghandi’s Triton Services provided employees and the offices, equipment, computers and tools for Clare’s Chevron Construction Services ; held the required licenses ; and even paid Clare’s salary.
TeamUS, of Pittsburgh, Pa., has received disabled-veteran contracts worth at least $53.5 million since 2007, including a June 2010 contract worth $3.4 million to renovate a building at the Dayton VA Medical Center. TeamUS was temporarily disqualified as a disabled-vet company in January 2009. An investigator for the Government Accountability Office in Dec. 2009 called TeamUS a “shell company” for the James Corp., another Pittsburgh-based construction company that did not own its own building or construction equipment. TeamUS’s owner, Chuck Martino, was a restaurateur and veteran who lived 80 miles away. TeamUS was reinstated to receive disabled veteran contracts in April 2009 after it distanced itself from James Corp.
Atlanta: Arthur Wayne Singleton, 62, was indicted last November and accused of using a bedridden Vietnam veteran’s name to illegally win about $2.8 million disabled-vet contracts. Singleton and the unnamed veteran formed a company called “GMT Mechanical-Singleton Enterprises,” which was awarded a $776,000 contract to replace a roof at the VA medical center in Cleveland in 2009. Singleton faces charges of wire fraud and conspiring to defraud the U.S. government.
Kansas City: Warren K. Parker, 69, was indicted on numerous counts last June after prosecutors say he invented a decorated military career in order to qualify for disabled-vet contracts. Parker’s company, Silver Star Construction, won more than $6 million in contracts in part based on Parker’s self-reported disabled-veteran status. Parker claimed he’d served three tours in the Vietnam War, collecting three silver stars and three purple hearts, among other accolades. He actually served five years in the 1960s in the Missouri National Guard, never leaving the state, prosecutors said. He was not disabled during his service. Parker’s wife, Mary K. Parker, and son, Michael J. Parker, also face charges, as does Thomas J. Whitehead, for whom Parker is accused of passing work through.
St. Louis: Michael Woodling, 53, and Joseph Madlinger, 71, pleaded guilty last month to creating a shell company and conspiring to bribe a VA contracting officer with sporting event tickets, meals and trips to a gentlemen’s club. The two recruited a veteran to set up a shell company to qualify illegally for disabled-vet work. The company, CJMS Contracting LLC, received $3.4 million in VA contracts. VA contracting officer Russell Todd, 69, pleaded guilty earlier this month to accepting $20,000 worth of illegal gratuities from Woodling and Madlinger.
Albuquerque, N.M.: Max R. Tafoya, 62, and Tyler Cole, 39, were charged Feb. 9 with illegally obtaining almost $11 million in disabled-vet contracts for M.R. Tafoya Construction. Prosecutors allege that Tafoya paid his step-brother, a service-disabled veteran who lives in Florida, $600 a week in exchange for being allowed to use his name for his company. Tafoya falsely claimed he sold M.R. Tafoya to his cousin for $100,000, prosecutors said. Tafoya and Cole are charged with counts of conspiracy and fraud, and Tafoya is charged with making false statements.
Brooklyn, N.Y.: John Raymond Anthony White, 46, was convicted last April of falsely claiming to be a veteran to help him qualify for more than $16 million in government contracts. When questioned by investigators, White lied and said another person was the owner of his company, Mitsubishi Construction Corporation. White is scheduled to be sentenced next month on fraud and other charges. He faces up to 75 years in prison and a maximum $3.75 million fine.
The following companies either were based in Ohio or performed taxpayer-funded work at federal facilities here. All of them were at some point deemed ineligible for a program that gives special preference for government contracts to businesses owned and controlled by disabled veterans. In each case, officials ruled that the disabled vet wasn’t really in charge.
Brigadier Construction Services, of Twinsburg: The VA disqualified Brigadier from disabled-vet contracts in February 2011. U.S. attorneys said a company that rented office space and shared employees with Brigadier actually controlled the business, not veteran owner Shawnte’ Thompson. The company has received $57.7 million in disabled veteran contracts since 2007.
Diversified Veterans Mechanical Services ,of Dayton: Wasn’t eligible for the program when its joint venture, AquaCare Services, submitted a bid for work at Wright-Patterson Air Force Base. The company withdrew its appeal of the ruling in September.
Everything Parking, of Charlotte, N.C.: Obtained $6.2 million in set-aside contracts in nine states, using the disabled-vet status of Curtis Springer, owner of Good Shepherd Village nursing home in Springfield. The company’s president is the son of Springer’s girlfriend.
Firewatch Contracting, of Florida: Officials ruled disabled vet Melvin Lowe, an Akron area insurance man, didn’t control the Tampa company because supermajority voting requirements in its bylaws prevented Lowe from making key decisions. Firewatch obtained $22.6 million in set-aside contracts from the VA, Air Force and Agriculture Department. The company has been reinstated.
First Capital Interiors, of Chillicothe: Allen Ballew gave his 51 percent share in a money-losing mom and pop business to his disabled-vet son, Eric, who was living 2,000 miles away near Los Angeles and working in construction and as a recording engineer and hip-hop music artist. Eric Ballew told the Daily News he was in charge and planned to relocate to Ohio, but an administrative judge blocked his bid for a job at the Chillicothe VA Medical Center. “We were presented as, 'The dad’s just trying to take advantage of the son’s (disabled veteran) status,’” Ballew said. “It wasn’t like that at all.”
United Medical Design Builders, of Kansas: The Small Business Administration ruled that disabled vet David Dial didn’t control the business and was thus ineligible for a 2010 contract with the VA’s National Energy Business Center in Seven Hills, Ohio, south of Cleveland. The company now is verified and has done $26.8 million in defense contracting.
Valor Contracting of Northwood, near Toledo: Officials ruled disabled vet Lorne Trainor didn’t control the company because he was bound by contractual language that prevented him from leaving Valor without the consent of his non vet partner, Derek W. O’Loughlin, or competing against it.
VetIndy of Chesterland, east of Cleveland: Officials pulled VetIndy’s $5.8 million contract with the Army Corps of Engineers because its operating agreement required that disabled vet Matthew Herchick’s partner, IE Group Inc., agree to major decisions.
Congress launched the Service-Disabled Veteran-Owned Small Business program in 2003 to help America’s wounded warriors make the transition to successful entrepreneurs.
Every federal agency has a goal of awarding at least 3 percent of the value of its contracts to businesses owned and controlled by veterans who have been deemed to be disabled while in military service. Contracts can be set aside so competition is limited to disabled-vet companies or, under certain circumstances, awarded without competitive bidding.
Veterans must have documentation of a service-connected disability. Any level of disability is enough to qualify a vet for the program.
Participating businesses must be at least 51 percent owned by one or more disabled vets. A disabled vet must hold the highest office and control the company’s long-term and day-to-day decision-making.
Companies must be small businesses as defined by the North American Industry Classification System.
Depending on the kind of business involved, participating companies must use their own employees, as opposed to subcontractors, for 15 percent to 50 percent of the cost of the work.
Source: U.S. Small Business Administration