The Justice Department on Friday sued a Monmouth County, New Jersey, 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.
VE Source LLC, based in Shrewsbury, New Jersey, and its owners, Sherman Barton and Chris Neary, along with a related company, Vertical Source Inc., allegedly defrauded the government by falsely claiming that VE Source was eligible for government contracts set aside for companies owned and controlled by service-disabled veterans.
Government clients include the U.S. Navy, the U.S. Department of Agriculture, the Department of Logistics Agency and the Department of Homeland Security.
To promote contracting opportunities for United States veterans, Congress has authorized federal agencies to make contracts available exclusively to service-disabled, veteran-owned small businesses, known as “SDVOSBs.” Small businesses must be both majority-owned by and controlled on a long-term and day-to-day basis by service-disabled veterans.
According to U.S. Attorney Craig Carpenito and 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 falsely certified that 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.
Barton is a 12 year veteran of the US Army working in Military Intelligence with the 66th Military Intelligence Group and the Berlin Brigade.
After his military service, he spent 18 years working for the Veterans Administration coordinating special projects on behalf of disabled veterans. He holds a B.S. from Rutgers University.
By diverting contracts and benefits intended for businesses owned and controlled by service-disabled veterans towards an ineligible company, the defendants undercut the express congressional purpose in enacting laws intended to encourage the awards of federal contracts to SDVOSBs.
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