Federal Jury Convicts North Carolina Couple Of Fraud
Husband and wife conspired to defraud federal contract programs for disadvantaged and disabled veteran-owned small businesses
GREENEVILLE, Tenn. - Following a 13-day trial in U.S. District Court, a jury convicted Ricky Anthony Lanier, 48, and his wife Katrina Reshina Lanier, 43, both of LaGrange, N.C., of conspiracy to commit wire fraud, wire fraud, and major fraud against the United States.
Sentencing is set for 9:00 a.m., on June 20, 2016, in U.S. District Court in Greeneville. Ricky Lanier faces a possible sentence of up to 60 years in prison and $1 million in fines; Katrina Lanier faces a possible sentence of up to 50 years in prison and $750,000 in fines. The Laniers agreed to forfeit their interests in approximately $170,000 in funds seized from bank accounts as well as five houses in Kinston, N.C., purchased with proceeds of the fraud.
According to the evidence presented at trial, the Laniers conspired from November 2005 to April 2013 to defraud the United States government through a scheme to fraudulently obtain federal contracts intended to be awarded to businesses lawfully participating in the Department of Veterans Affairs’ (VA) Service-Disabled Veteran-Owned Small Business (SDVOSB) program and the Small Business Administration’s (SBA) 8(a) Business Development program. The scheme involved false representations that JMR Investments was eligible as an 8(a) business and that Kylee Construction was eligible as an SDVOSB and an 8(a) business. Ricky Lanier, who had previously owned and operated an 8(a) business receiving government contracts, became ineligible to participate in the 8(a) program after that business graduated from the 8(a) program in 2008. Lanier used a friend and service-disabled veteran as the purported owner of Kylee Construction, representing that the friend was involved in the daily management of the business, even while the friend was working for a government contractor in Afghanistan. The Laniers used a business owned by Ricky Lanier’s college roommate, JMR Investments, as a front to obtain construction contracts from the National Park Service and other federal agencies under the 8(a) program, misrepresenting the friend’s involvement in the management and operation of the business. The scheme also involved sub-contracting out all or almost all of the work on the contracts in violation of program requirements. Among other contracts, Ricky Lanier defrauded the National Park Service in connection with a contract to replace a wastewater treatment facility at the Tremont Institute in the Great Smoky Mountains National Park, falsely representing that subcontractor costs were over $400,000 more than they actually were, resulting in the award of a contract for $1.1 million when all work on the project was performed by a Kodak contractor for $550,000. Lanier also fraudulently obtained a $1.3 million construction contract at the James H. Quillen VA Medical Center which had been set aside for SDVOSBs.
As a result of the false representations, Kylee Construction was awarded over $5 million in government contracts and JMR Investments was awarded over $9 million in government contracts, to include contracts for construction at the VA Medical Center at Mountain Home, Tenn., and in the Great Smoky Mountains National Park. The Laniers received almost $2 million in financial benefit from the scheme, using accounts of the shell companies for payment of personal expenses.
Nancy Harr, Acting U.S. Attorney for the Eastern District of Tennessee said, “The integrity of the Service-Disabled Veteran-Owned Small Business program is vital to its continued success. The U.S. Attorney’s Office will aggressively pursue and prosecute those who attempt to defraud that federal program and therefore the United States.”
“Consistent with Public Law 109-461, awarding contracts to Service-Disabled Veteran-Owned Small Business (SDVOSB) firms is the highest priority within the Small Business programs for VA. Today’s guilty verdict is indicative of the hard work and successful relationships between VA OIG, DOJ, and our law enforcement partners to protect the integrity of the SDVOSB program, and deter those who attempt to defraud our government,” said Special Agent in Charge Monty Stokes, VA, Office of Inspector General, Southeast Field Office.
Kevin Kupperbusch, Special Agent in Charge, SBA, Office of Inspector General (OIG), stated, “Effective partnerships among several law enforcement agencies as well as aggressive investigative efforts were key in bringing these defendants to justice. These convictions should serve as a deterrent to others who intend to take advantage of disabled military veterans and defraud the Federal Government through its various contracting programs.”
Special Agent in Charge Bill Gulsby, Department of Interior, OIG, joined in recognizing the efforts of the investigative team in protecting these important programs.
Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Ricky and Katrina Lanier included the VA, OIG; SBA, OIG; with assistance from the U.S. Secret Service. Assistant U.S. Attorneys Neil Smith and David Gunn represented the United States at trial.