Ohio, West Virginia residents charged with deriving unlawful profits from federal grants
WHEELING, WEST VIRGINIA – A federal grand jury has returned an indictment charging Michael J. Marshall, 64, Brandt Stover, 61, Stephen M. Powell, 52, all of Steubenville, Ohio, and Nicole P. Northcraft, 42, of New Cumberland, West Virginia, with manipulating business development programs facilitated by the United States Small Business Administration to derive unlawful profits of approximately twenty-four million dollars, United States Attorney William J. Ihlenfeld, II, announced.
The defendants operated various businesses participating in Small Business Administration programs and are alleged to have submitted false eligibility statements and allowed unauthorized individuals to exercise control over the businesses. In total, the defendants are alleged to have fraudulently sought and received federal agency contracts in excess of one hundred and forty million dollars.
The defendants are each charged with:
• One count of “Conspiracy to Defraud the United States,” for which they each face up to five years in prison and a fine of up to $250,000,
• One count of “Attempt and Conspiracy to Commit Wire Fraud.” For which they each face up to 20 years in prison and a fine of up to $250,000, and
• Three counts of “Wire Fraud.” They each face up to 20 years in prison and a fine of up to $250,000 on each count.
Stover is additionally charged with:
• Two counts of “Conspiracy to Defraud the Government with Respect to Claims.” He faces up to 10 years in prison and a fine of up to $250,000 on each count,
• Four counts of “Willfully Causing the Submission of False, Fictitious and Fraudulent Claims.” He faces up to five years in prison and a fine of up to $250,000 on each count, and
• One count “Tampering with a Witness,” for which he faces up to 20 years in prison and a fine of up to $250,000.
Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
According to Ihlenfeld, the Small Business Administration operates programs to assist socially or economically disadvantaged business operators and disabled veterans in competing for government contracts. The businesses must be unconditionally owned and controlled by the qualifying individuals in order to comply with federal law.
"This indictment alleges that the defendants conspired to exploit the Small Business Administration's 8(a) program regulations to defraud the Department of Defense (DoD) and other federal agencies," said Craig W. Rupert, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Northeast Field Office. "Through these schemes, the defendants allegedly took U.S. taxpayer dollars from the 8(a) contracts intended to support the U.S. military. These acts erode public confidence and deny opportunities for honest contractors. The American taxpayer expects the DoD Office of the Inspector General and DCIS to champion fiscal accountability and acquisition integrity. DCIS, along with our law enforcement partners, continues to shield America's investment in national defense and to vigorously investigate procurement fraud allegations."
“Our office will continue to pursue justice against those who commit fraud to gain access to SBA’s preferential contracting programs,” said Small Business Administration Inspector General Peggy E. Gustafson. “The defendants’ actions deprived legitimate disadvantaged companies of federal contracting opportunities. I want to thank the U.S. Attorney’s office for its dedication and leadership throughout the investigation.”
Assistant U.S. Attorneys Robert H. McWilliams and Andrew Cogar are prosecuting the case on behalf of the government. The United States Small Business Administration, the Department of Defense Inspector General, the Department of Veterans Affairs, the Department of Labor, and the Federal Bureau of Investigation are leading the inquiry.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.