An Illinois business owner, Darren Smith, has been convicted on eight counts of wire fraud for orchestrating a lucrative kickback scheme involving a U.S. Department of Veterans Affairs clerk, culminating in fraudulent earnings of approximately $1.3 million. The biz owner’s illegal operations came to light after a vigorous trial that concluded with a guilty verdict this Monday.
Biz Owner $1.3M VA Kickback Scheme : A Complex Web of Deceit
The government’s case revealed that Smith, through his company Veterans Choice Equipment and Services, collaborated with Andrew Lee, a VA prosthetics purchasing clerk and co-defendant who has already pleaded guilty. This collusion allowed Smith to funnel $2.78 million in VA business towards his company. The scheme primarily involved overpriced and redundant monthly rental fees for medical equipment that other companies sold outright.
The initial jury could not reach a consensus, leading to a mistrial declared by U.S. District Judge Edmond Chang last November. However, the subsequent trial ended in Smith’s conviction. Sentencing is scheduled for September, though a date for Lee’s sentencing remains undetermined.
Scheme Details and Government Assertions
Assistant U.S. Attorney Heidi Manschreck argued that the biz owner’s kickback scheme exploited his relationship with Lee to significantly overcharge the VA. The duo manipulated product sales under the guise of rentals to repeatedly bill for equipment, notably compression pumps, which were priced just below Lee’s purchasing threshold of $3,500.
