Saturday, June 18, 2016

Non-Veteran Owed Business Guilty of $100 Million Fraud

Executive of sham ‘veteran-owned’ firm found guilty of $100m fraud
Boston Globe
By Dan Adams GLOBE STAFF
JUNE 17, 2016

Government regulations mandate that a “Service-Disabled Veteran-Owned Small Business” must be majority-owned and managed by veterans who became disabled while serving in the military to receive preferential awards of federal contracts.
A Chelmsford man who won $100 million in federal construction contracts by saying that his construction company was owned by disabled veterans was found guilty of fraud by a federal jury in Boston Wednesday.

Prosecutors said David Gorski recruited two veterans to stand in as the majority owners and top executives of his construction firm so it could win federal contracts that give preference to veteran-owned companies.

In reality, prosecutors said, Gorski controlled Legion Construction as it won numerous Army, Navy and US Department of Veterans Affairs contracts from 2006 to 2010.

Gorski paid himself salaries as high as $356,000, according to court documents, and also paid his wife —who worked full-time for the town of Chelmsford — $400 a week.

Gorski was convicted of four counts of wire fraud and one count of conspiracy to defraud the government. He is scheduled to be sentenced in September, and could face up to 25 years in prison.
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