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Press Release

Former Department Of Veterans Affairs Official Sentenced To 46 Months In Prison For Taking $1.2 Million In Kickbacks

For Immediate Release
U.S. Attorney's Office, District of New Jersey

TRENTON, N.J. – A former Department of Veterans Affairs (VA) employee who worked as a supervisory engineer at the VA’s campus in East Orange, New Jersey, was sentenced today to 46 months in prison for accepting more than $1.2 million in kickback payments in connection with VA contracts awarded to companies with which he had relationships, and to engaging in a scheme to defraud the VA by claiming one of those companies was owned by a service-disabled veteran when it was not, U.S. Attorney Paul J. Fishman announced.

Jarod Machinga, 45, of Hopewell, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of honest services wire fraud, one count of wire fraud and one count of engaging in a monetary transaction in criminally derived property. Judge Cooper imposed the sentence today in Trenton federal court.

According to documents filed in this case and statements made in court:

As a supervisory engineer, Machinga had the authority and influence to direct certain VA construction contracts to particular companies. Machinga partnered with a person – identified in the information as “Individual 1” – to set up three companies that could be used to obtain VA work. He then directed more than $6 million worth of VA construction projects to those companies. Machinga admitted he accepted $1,277,205 in kickbacks in exchange for his official action and influence between 2007 and July 2012.

Congress has established a program through which certain VA contracts are reserved for small businesses that are owned and controlled by service-disabled veterans. One of Individual 1’s companies entered into such a contract with the VA after Machinga falsely represented to the VA that it was a service-disabled veteran-owned small business – even though Individual 1 was not a veteran. Machinga then used his official position and influence at the VA to award such a contract to Company 1. The company was paid more than $3 million by the VA in connection with the contract.

Machinga also admitted that for many of the projects awarded to Individual 1’s companies, he recruited other contractors to perform the work so the companies were able to keep the money paid to them without having to incur the expense of actually completing the projects.

In addition to the prison term, Judge Cooper sentenced Machinga to serve one year of supervised release.

U.S. Attorney Fishman credited special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes; the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

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.

Defense counsel: Fortunato N. Perri Jr. Esq., Philadelphia

Updated June 30, 2015

Press Release Number: 15-249