Chelmsford Man Convicted of Defrauding Disabled Veterans Program of More Than $100 Million
BOSTON – Yesterday, a federal jury found David E. Gorski, of Chelmsford, guilty of conspiracy to defraud the United States and wire fraud.
The jury found that Gorski conspired to defraud the United States by impairing the lawful governmental function of the Department of Veterans Affairs, the General Services Administration, the Army, and the Navy in the implementation and administration of the Service Disabled Veteran Owned Small Business (“SDVOSB”) Program.
Gorski established a company, Legion Construction, Inc., in 2006 after recruiting a disabled veteran of the Korean War to act as the company’s straw owner for the sole purpose of obtaining federal construction contracts set aside under the SDVOSB Program. The purpose of the SDVOSB program is to provide federal contracting assistance to service-disabled veterans who own small businesses by creating set-aside and sole source acquisitions for such businesses. When the veteran’s absence from the business became too conspicuous, Gorski hired a second disabled veteran, Peter Ianuzzi, to serve as the figurehead owner of Legion. Legion acquired more than $110 million in federal contracts between 2006 and November 2010, after Gorski falsely represented to federal contracting officers that the company was owned and operated by service-disabled veterans.
In March 2010, a different SDVOBS registered a bid protest against Legion, alleging that Legion should not have been awarded a contract with the VA at its medical center in White River Junction, VT. The company specifically challenged Legion’s SDVOSB status, noting that it appeared that Gorski, not one of the veterans, was the person really running Legion. After retaining the services of a large Boston law firm to assist him, Gorski filed an opposition to the bid protest that contained false information. The Small Business Administration denied the bid protest based on Legion’s submission. Gorski then began exploring ways to siphon money from Legion that would not appear as compensation exceeding the pay of the nominal veteran owner, Ianuzzi, in violation of federal regulations, including Ianuzzi “gifting” him $900,000 and establishing private bank accounts into which the company would deposit $2.5 million for Gorski’s benefit. Before the bank accounts could be opened, however, a federal grand jury issued subpoenas to Legion and several witnesses.
Gorski faces up to five years in prison, to be followed by up to three years of supervised release and a maximum fine of $250,000 on the count of conspiracy to defraud the United States. On the wire fraud counts, Gorski faces up to 20 years in prison, to be followed by up to three years of supervised release and a maximum fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Jeffrey Hughes, Special Agent in Charge, Department of Veterans Affairs, Office of the Inspector General, Northeast Field Office; Luis A. Hernandez, Special Agent in Charge, General Services Administration, Office of the Inspector General; Kevin Kupperbusch, Special Agent in Charge, Small Business Administration, Office of the Inspector General; Michael D. Conner, Regional Agent in Charge, U.S. Army Criminal Investigation Command, Boston Fraud Office; and Leo Lamont, Special Agent in Charge, Naval Criminal Investigative Service, Northeast Field Office. The case was prosecuted by William F. Bloomer of Ortiz’s Public Corruption Unit and Carlos A. Lopez of Ortiz’s Narcotics and Money Laundering Unit.