Construction Company Owner, KC Veteran Indicted in $13.8 Million 'Rent-A-Vet' Scheme

https://www.justice.gov/usao-wdmo/pr/construction-company-owner-kc-veteran-indicted-138-million-rent-vet-scheme

Department of Justice
U.S. Attorney’s Office
Western District of Missouri

FOR IMMEDIATE RELEASE
Friday, January 13, 2017

Construction Company Owner, KC Veteran Indicted in $13.8 Million 'Rent-A-Vet' Scheme

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former owner of a local construction company and a Kansas City, Mo., veteran were indicted by a federal grand jury today for their roles in a “rent-a-vet” scheme to fraudulently obtain more than $13.8 million in federal contracts. Jeffrey K. Wilson, 51, of the Village of Loch Lloyd in Belton, Mo., Paul R. Salavitch, 56, of Kansas City, Mo., and Patriot Company, Inc., a business located in Kansas City, Mo., were charged in an eight-count indictment returned by a federal grand jury in Kansas City, Mo.

Today’s indictment alleges that Wilson, Salavitch and the Patriot Company participated in a conspiracy to defraud the government by falsely representing Patriot Company as a veteran-owned or service-disabled veteran-owned small business in order to fraudulently obtain approximately $13.8 million in federal government construction contracts for work in nine states.

According to the indictment, Patriot Company was a pass-through or front company for a Greenwood, Mo., construction company owned by Wilson during the scheme. Conspirators allegedly used Salavitch’s veteran and service-disabled veteran status in a “rent-a-vet” scheme to bid on at least 20 government contracts and receive approximately $13.8 million to which Patriot Company would not have otherwise been entitled to receive because those contracts were set-aside exclusively for legitimate veteran-owned or service-disabled veteran-owned small businesses. As a result of the fraud scheme, legitimate veteran owned and run businesses were not awarded these contracts.
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According to the indictment, Salavitch, a service-disabled veteran, worked full-time as a federal employee with the Department of Defense in Leavenworth, Kan., and did not work full time for Patriot Company. Salavitch nominally served as president of Patriot Company from July 14, 2005, to April 1, 2014. Salavitch did not actively control the day-to-day management, daily operation or long-term decision making of Patriot Company. Salavitch never managed a construction company prior to his involvement with Patriot Company, the indictment says, and he had limited government contracting experience.
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