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Press Release

San Diego Contractor Pleads Guilty in $11 Million “Rent-A-Vet” Scheme

For Immediate Release
U.S. Attorney's Office, Southern District of California

Assistant U.S. Attorneys Rebecca Kanter (619) 546-7304 and Aaron Arnzen (619) 546-8384

NEWS RELEASE SUMMARY – November 15, 2019

SAN DIEGO, CA – Action Telecom, a Santee-based government contractor, pleaded guilty in federal court Thursday to fraud charges, admitting that the company illegally obtained $11 million in federal contracts that were supposed to be set aside for service-disabled veteran-owned businesses.

Action Telecom was indicted in April along with another company, A&D General Contracting, Inc., and its owner, Andrew Otero. Otero and A&D were convicted by a federal jury on fraud and conspiracy charges a year ago and were sentenced in June to 18 months custody and over $1.5 million in financial penalties.

Action Telecom, which is co-owned by Navy veteran Roger Ramsey and non-veteran Bruce Madden, admitted in its plea agreement to participating in a conspiracy to defraud the government by forming a joint venture with A&D – and falsely representing that Action and the joint venture qualified as service-disabled veteran-owned small businesses (SDVOSB). Based on the false claim to SDVOSB eligibility, the conspirators fraudulently obtained approximately $11 million in federal government construction contracts or task orders with the Department of Veterans Affairs and the Army Corps of Engineers.

The fraud conspiracy involved set-aside contracts that could only be bid upon by legitimate service-disabled veteran-owned small businesses – a designation that did not apply to Otero or A&D.  To appear qualified, Ramsey, Madden and co-conspirator Otero initially executed an agreement to create the joint venture, which stated that Action Telecom would be the managing venturer, employ a project manager for each of the set-aside contracts, and receive the majority of the joint venture’s profits.

However, Otero, Ramsey and Madden signed a secret side agreement six months later that made clear the joint venture was ineligible under the SDVOSB program. For example, the side agreement said the parties created the venture so that A&D could simply “use the Disabled Veteran Status of Action Telecom” to bid on contracts.  The side agreement also stated that A&D – not Action Telecom – would run the construction jobs.  They also agreed that “A&D will keep 98 percent of every payment; Action Telecom will receive 2 percent of every payment.”

In addition to the secret side agreement, the joint venture did not operate as a legitimate SDVOSB, but was essentially controlled by Otero and A&D.  For example, although Ramsey (a service-disabled veteran) nominally served as president of Action Telecom and the joint venture, he actually worked full-time as a vice president for another telecommunications company owned by Madden.  Otero and A&D, not Ramsey, controlled the day-to-day management, daily operation and long-term decision making of the joint venture. Among other things, Otero and A&D appointed an A&D employee as the project manager for every contract and task order.

“Our nation strives to repay the debt of gratitude we owe to our veterans by setting aside some government contracts for veterans with service-related disabilities,” said U.S. Attorney Robert Brewer.  “These unscrupulous contractors abused this program through a cynical and illegal ‘rent-a-vet’ scheme.  Our office will continue to protect these programs and hold those who abuse them fully accountable.”

Acting SAC Rebeccalynn Staples, Veterans Affairs Office of Inspector General (VA OIG), stated, “Every day legitimate SDVOSB companies lawfully compete to obtain set aside government contracts. Unfortunately, some non-veteran owned companies misrepresent themselves as a SDVOSB and fraudulently obtain set side contracts.  The VA OIG remains committed to aggressively pursuing these cases in an effort to maintain the sanctity of the program for all veterans.”

Action Telecom was ordered to appear before U.S. District Judge John Houston for sentencing on February 10, 2020 at 10 a.m.


Action Telecom Inc., Santee, California

Criminal Case No. 17CR0879-JAH


False statement, in violation of 18 U.S.C. § 1001

Maximum penalty: Five years in prison


Department of Veterans Affairs, Office of Inspector General


Updated November 15, 2019

Financial Fraud
Press Release Number: CAS19-1115-ActionTelecom