The Front Companies Got 1–3%. The Real Contractors Got the Contracts.

Disabled-veteran front companies won set-aside contracts while two firms that weren’t eligible priced the bids, picked the subs and ran the jobs — paying the fronts about 1–3%. $21.3M. Unusually, the settlement records the defendants admitting responsibility.

From about April 2017 to May 2025, the defendants allegedly used purported service-disabled veteran-owned small businesses (SDVOSBs) and other small businesses as pass-throughs to win federal set-aside contracts they were ineligible for. Neither executive is a service-disabled veteran.

Broadway and Cornerstone found the opportunities, priced the bids under the front companies’ names, secured bonding, picked subcontractors and controlled execution, staffing and payroll. The front businesses typically received fixed payments of about 1 to 3 percent of contract value while the remaining revenue flowed to Broadway, Cornerstone and their chosen contractors — even after an SDVOSB owner raised compliance concerns.

One distinction worth recording: unlike most settlements in this library, this agreement states that the defendants admit, acknowledge and accept responsibility for the conduct described. VA OIG assisted the investigation.

"purported small businesses received fixed payments, typically approximately one to three percent of total contract value"
— U.S. Department of Justice, Office of Public Affairs

Source: U.S. Department of Justice, Office of Public Affairs. Case file in the VA Fraud case files — part of the VA Fraud record. Cases are published as the courts decided them; amounts are stated as the Justice Department states them (billed, stolen, or ordered in restitution, as labeled).