Construction Firms to Forfeit $21.3M Over Fraudulent Veteran-Contract Scheme
Two linked building companies and their leaders will surrender over $21 million after accusations they illegally obtained federal agreements reserved for businesses owned by disabled former service members.
Construction Firms to Forfeit $21.3M Over Fraudulent Veteran-Contract Scheme
Two affiliated building enterprises and their top leaders have agreed to surrender $21.3 million to settle claims they unlawfully obtained federal agreements reserved for companies owned by disabled former service members and other qualifying small firms.
Broadway Electric Inc., Cornerstone Contracting Inc., CEO John Oehler, and President Christian Blake consented to the payout to resolve alleged False Claims Act breaches. Prosecutors allege the group secured restricted procurement deals for which they were ineligible.
Between approximately April 2017 and May 2025, the accused allegedly ran a prolonged operation using purported service-disabled veteran-owned small businesses (SDVOSBs) and other eligible firms as fronts. Legal filings show neither Oehler nor Blake served as disabled veterans, rendering them unqualified to head such entities. Although agreements were statutorily limited to qualifying small enterprises, employees from the two construction firms allegedly directed operations, personnel decisions, and monetary matters.
Federal acquisition regulations set aside certain deals for small businesses meeting particular standards, including those operated by former military personnel with service-connected disabilities. These initiatives seek to open contracting doors for eligible veteran business owners.
Numerous agency watchdog offices collaborated on the probe. The VA inspector general vowed to keep targeting unscrupulous firms that enrich themselves through programs meant for disabled veteran proprietors. The Pentagon's criminal investigative arm stressed that such rackets siphon essential resources, damage equitable bidding, and violate the very veterans these efforts aim to support.
The Small Business Administration's chief lawyer portrayed the resolution as stemming from intensified efforts by the current presidential administration to uncover wrongdoing in contracting aid programs. The SBA inspector general similarly remarked that initiatives established to assist disabled former troops ought not be misused for personal enrichment.
Additional contributing bodies included the GSA inspector general and the postal inspection service. The latter declared that regardless of how convoluted the dishonest scheme, federal authorities remain dedicated to prosecuting procurement cheats.
Under the settlement terms, defendants confessed, recognized, and took accountability for spotting contracting chances and crafting proposals filed under the identities of ostensible small businesses via partnership pacts, collaborative arrangements, and advisory relationships.
Source: U.S. Department of Justice
Source: DOJ Justice News