FOR IMMEDIATE RELEASE
June 10, 2014
TRENTON, N.J. – A Mercer County, N.J., woman today admitted paying bribes to a former Department of Veterans Affairs (VA) employee who worked as a supervisory engineer at the VA’s campus in East Orange, N.J., U.S. Attorney Paul J. Fishman announced.
Donna Doremus, 46, of Hopewell, N.J., pleaded guilty today before U.S. District Judge Mary L. Cooper in Trenton federal court to three counts of a four-count information charging her with one count of bribing a public official, one count of conspiracy to defraud the United States and two counts of making and subscribing to false federal tax returns.
According to documents filed in this case and statements made in court:
The bribes were paid in connection with VA contracts awarded to companies Doremus owned. She also admitted to a conspiracy to defraud the United States by falsely representing that one of her companies was owned and controlled by a service-disabled veteran.
From 2007 to July 2012, Doremus paid approximately $671,000 in bribes to a former VA official, Jarod Machinga, 44, also of Hopewell, in connection with VA contracts awarded to three companies she owned and controlled. In his position as a supervisory engineer, Machinga had the authority and influence to direct certain VA construction contracts to particular companies. Machinga directed more than $6 million of VA construction projects to Doremus’ companies.
One of Doremus’s companies, Tyro General Construction (Tyro), entered into a service-disabled, veteran-owned small business contract with the VA. Congress has established a program whereby certain VA contracts are reserved for small businesses that are owned and controlled by service-disabled veterans. Doremus conspired with Machinga to falsely represent to the VA that Tyro was a service-disabled, veteran-owned small business so that Tyro could improperly obtain a lucrative construction contract from the VA. Machinga then used his official position and influence at the VA to award such a contract to Tyro. In total, Tyro was paid more than $3 million by the VA in connection with this service-disabled veteran-owned contract.
Doremus also engaged in a tax crime. For tax years 2009 and 2010, she intentionally falsely reported on her federal tax returns that certain of the bribe payments she made to Machinga, as well as certain of her personal expenditures, were her companies’ business expenses. As a result, she failed to pay $250,374 in federal income taxes that she owed the IRS.
On Sept.18, 2013, Machinga pleaded guilty before Judge Cooper in connection with his accepting kickbacks from Doremus and engaging in a scheme to defraud the VA. He is awaiting sentencing.
The bribery count to which Doremus pleaded guilty carries a maximum potential penalty of 15 years in prison and a fine of the greater of $250,000; twice the gross pecuniary loss or gain; or three times the value of the bribe paid. The conspiracy to defraud the United States count to which Doremus pleaded guilty carries a maximum potential penalty of five years in prison and a fine equal to the greatest of $250,000 or twice the pecuniary gain or loss. The false tax return count to which Doremus pleaded guilty carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 22, 2014.
U.S. Attorney Fishman praised special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes; special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, for their work leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division and Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.