Federal Grand Jury In San Antonio Indicts Three In Fraudulent U.S. Army Contracts Schemes
A federal grand jury in San Antonio has returned an indictment charging two San Antonio area men and a Manhattan, KS, woman for their roles in a scheme to defraud the United States in connection with contracts worth millions of dollars’ for medical equipment and personnel training announced United States Attorney Robert Pitman.
The 40-count indictment, returned late yesterday, charges 42-year-old Lawrence Peter Fenti of New Braunfels, TX, 50-year-old Heidi Lynn Webster and 43-year-old John Walter Hoffman, owner/operator of Hoffman Surgical Devices, Inc. in San Antonio, with one count of conspiracy to commit wire fraud. Fenti is also charged with seven counts of bribery, seven counts of wire fraud, seven counts of making false statements to U.S. Army authorities, five counts of money laundering, four counts of making false claims against the U.S., four counts of participating in a government matter affecting personal interest and one count of impersonation of a U.S. Army officer. Webster is also charged with seven counts of bribery, seven counts of wire fraud, four counts of making false claims against the U.S., and four counts of participating in a government matter affecting personal interest. Hoffman is also charged with five counts of money laundering, two counts of wire fraud and two counts of making false statements to U.S. Army authorities.
According to the indictment, Fenti was a non-commissioned officer trained as a technician who worked in the radiology departments of various Army medical facilities including Irwin Army Medical Center at Fort Riley, KS, and Brooks Army Medical Center (BAMC) at Fort Sam Houston in San Antonio. In 2008, Fenti was selected as the non-commissioned officer in charge of Base Realignment and Closure issues for BAMC radiology. From 1995 until 2006, Webster was an Army officer physician specializing in radiology at BAMC and Irwin. In 2006, Webster was discharged from the Army but continued to work under a contract with the Army to provide radiology services at Irwin. In 2007 and 2008, Webster formed two KS corporations—MRI Resources, Inc. and Pro Veteran Staffing, Inc. Data Dynamics Inc. was a Grafton, ND, company engaged in the business of transcribing medical records. It was certified by the Small Business Administration as owned by a socially and economically disadvantaged person and was eligible to obtain certain federal contracts with, or with limited, competition.
The indictment alleges that since 2007, the defendants schemed to secure multiple Army contracts and sub-contracts for radiology equipment and services by using their positions of influence, taking advantage of Data Dynamics’ non-competitive bidding status, making false statements and fraudulent claims, as well as bribing Army personnel and Army contractors. Those contracts included a $2 million BAMC magnetic resonance imaging (MRI) contract in June 2008, a $4.9 million BAMC MRI contract in July 2008, a $633,406.69 BAMC staffing contract in September 2008, and a $336,600 MRI contract in September 2009 for Womack Army Medical Center at Fort Bragg, NC.
Once contracts were secured by a prime contractor, typically by Data Dynamics, the defendants allegedly stole money from the Army by causing the prime contractor to overcharge the Army and then submitted substantially overinflated invoices from MRI Resources or Pro Veteran Staffing to prime contractors, allowing the defendants’ companies to collect monies that had not been earned.
Upon conviction, defendants face up to 20 years imprisonment for each bribery, money laundering and wire fraud count; up to five years imprisonment for each conspiracy, false statement and false claim count; and, up to three years imprisonment for the impersonation of a U.S. Army officer. The indictment also seeks a monetary judgment against Webster in the amount of $613,828 and Fenti in the amount of $542,485.35, representing the amount of proceeds obtained directly or indirectly as a result of their fraudulent scheme.
This indictment resulted from an investigation conducted by the U.S. Army Criminal Investigations Division. Assistant United States Attorney James Blankinship is prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.