VA Contractor Fraud: Wearing the Disabled Veteran as a Costume
Congress set aside a slice of federal contracting for businesses owned by service-disabled veterans. This lane is the record of the people who stole that slice anyway — by installing a veteran as a figurehead, by renting his status for 2% of the take, or, in one case, by inventing the disabled veteran entirely.
The mechanics repeat because they work. In the Padron case, conspirators put a service-disabled veteran in the owner’s chair of a construction company while they ran it and harvested more than $240 million in set-aside contracts. Boykin Contracting rotated straw owners for a decade — posing, as the record puts it, as a woman, a minority, a disabled person and a veteran — across $160 million in contracts. And John White skipped the middleman: he claimed to be a disabled veteran, won $16 million in VA construction contracts, and had never served a day.
The purest document in the lane is the Otero side agreement, which said the quiet part in writing: the joint venture existed to “use the Disabled Veteran Status” of the veteran partner, who received 2% of every payment while the non-veteran’s firm kept 98%. A jury convicted on that paper.
These are thefts committed twice — once from the Treasury, and once from every legitimate disabled-veteran-owned business that bid honestly and lost to a costume.
## Set-aside contracting fraud — stealing from disabled veterans twiceThe Figurehead: $240 Million in Contracts Meant for Disabled Veterans
Conspirators installed a service-disabled veteran as a figurehead owner while they ran the company and took $240M in contracts set aside for disabled-veteran-owned businesses. The veteran was the costume.
$240M+ (Set-aside contracts secured by the fraud) — Convicted · 27 months in prison; $1.75M fine (Padron)
Straw Owners: Posing as a Woman, a Minority, a Disabled Person and a Veteran
For over a decade, Boykin Contracting used straw owners posing as a woman, a minority, a disabled person and a veteran to qualify for $160M in set-aside contracts. 51 months.
$160M+ (Government contracts obtained through the programs) — Convicted · 51 months in federal prison; three years’ supervision
Rent-a-Vet: The Side Deal That Kept 98% of Every Payment
A secret written side agreement said the quiet part out loud: the venture existed to “use the Disabled Veteran Status” of the veteran partner — who got 2% while the non-veteran’s firm kept 98%.
~$11M (VA and Army Corps contracts fraudulently obtained) — Convicted · Convicted by a federal jury (conspiracy, major fraud, wire fraud, false statements)
Never Served a Day: The Fake Disabled Veteran Who Took $16 Million
John White claimed to be a disabled veteran and won $16M in VA construction contracts. He had never served in the military at all. 41 months.
$16M+ (Government contracts fraudulently obtained) — Convicted · 41 months in prison; three years’ supervised release; $30,000 fine
The 95% Pass-Through
James Clark — never a service-disabled veteran — ran front companies that won $12M in set-aside contracts and passed up to 95% of the money through to his own ineligible firm.
$12M+ (Set-aside contracts obtained) — Convicted · Convicted by a federal jury (major fraud, wire fraud, false claims)
$671,000 in Bribes to the VA Engineer Who Steered the Work
A contractor paid a VA supervisory engineer $671K in bribes; he steered $6M in VA construction projects to her companies — including one falsely claimed as disabled-veteran-owned. Both went to prison.
$671K / $6M+ (Bribes paid / VA projects steered) — Convicted · Doremus: 37 months. Machinga: 46 months. $671,975 forfeiture
Snow Removal That Never Happened
A VA contract officer approved invoices for snow removal that was unnecessary or never performed, took bribes through a bookkeeper — and the bookkeeper tipped off the target when the FBI came. All four pleaded guilty.
$347,000 (Estimated government losses) — Convicted · Garner and Vaughan: one year and one day each. Johnson: five years’ probation. Moore: three years’ probation
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.
$21.3M (Settlement (joint); whistleblowers receive $3,674,250) — Settled (allegations resolved by agreement) · Settled (2026): $21.3 million paid jointly; defendants admitted and accepted responsibility in the agreement
Aurora: The $328 Million VA Hospital That Cost $1.7 Billion
Aurora: the $328 million hospital that cost $1.7 billion — the contracting failure so large Congress took the VA’s construction authority away.
The Other Three Hospitals: $1.5 Billion in Overruns Beyond Aurora
From the report library: construction cost overruns at Orlando, Las Vegas and New Orleans, in the inspector general’s numbers.
COVID Procurement: $4 Billion Into a Broken Supply Chain
From the report library: pandemic procurement — what the VA bought in a hurry, and what it got.
Paid Twice: $101.4 Million in Duplicate Community Care Payments
From the report library: duplicate and bulk payments in community care — the payment system paying twice.
This lane holds 8 set-aside and pass-through cases. The full index — every category, every status — is The Case Files, and the whole section starts at the VA Fraud hub.