The U.S. Justice Department has sued a Shrewsbury company for allegedly defrauding the United States by falsely claiming to be eligible for more than $16.5 million in government contracts set aside for service-disabled, veteran-owned small businesses, U.S. Attorney Craig Carpenito announced.
VE Source, LLC, and its owners, Sherman Barton and Chris Neary, along with a related company, Vertical Source Inc., allegedly defrauded the government by falsely claiming VE Source was eligible for government contracts that have been set aside for companies owned and controlled by service-disabled veterans, according to a press release from the U.S. Attorney’s Office.
To promote contracting opportunities for U.S. veterans, Congress has authorized federal agencies to make contracts available exclusively to service-disabled, veteran-owned small businesses, known as SDVOSBs, according to the press release.
Small businesses must be majority owned by and controlled on a long-term and day-to-day basis by service-disabled veterans.
According to the complaint, VE Source obtained contracts from the U.S. Department of Agriculture (USDA) and the Defense Logistics Agency (DLA), a component of the U.S. Department of Defense.
Under the DLA contract, VE Source was paid to deliver fire-retardant coveralls for the U.S. Navy; under the USDA contract, VE Source was paid to deliver aprons and apron strings to the USDA.
Both contracts were set-aside for SDVOSBs.
VE Source’s owners allegedly falsely certified the company was controlled by Sherman Barton, a service-disabled veteran, when the company was in fact controlled by Christopher Neary, who is not a service-disabled veteran.
By diverting contracts and benefits intended for businesses owned and controlled by service-disabled veterans toward an ineligible company, the defendants undercut the express congressional purpose in enacting laws intended to encourage the awards of federal contracts to SDVOSBs, according to the complaint.
