Joplin Business Owner Indicted for $3 Million Fraud Scheme Related to 2011 Tornado Clean-Up
Neosho Man Defrauded in Contract Designated for Disabled Veteran-Owned Businesses
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Joplin, Mo., business owner has been indicted by a federal grand jury for a $3 million disaster fraud scheme in which his company received a government contract, designated for a service disabled veteran-owned small business that hired local workers, to clean up debris following the May 2011 tornado.
Raul R. Gonzales, 47, of Neosho, Mo., was charged in a 10-count indictment returned by a federal grand jury in Springfield, Mo., on Tuesday, June 7, 2016.
Under the terms of a contract managed by the U.S. Army Corps of Engineers to remove tornado debris from public rights-of-way and residential property in the wake of the 2011 tornado, the prime contractor was required to be a service disabled veteran-owned small business. The contract also specified that at least 50 percent of the work must be done by employees residing in Jasper and Newton counties.
Gonzales owned and operated Intelligent Investments, Inc., in Joplin, which was registered with the Department of Veterans Affairs as a service disabled veteran-owned small business. Intelligent Investments was awarded a contract in June 2011 and received payments of approximately $3 million.
According to the federal indictment, a company outside the state of Missouri – identified in the indictment as Company A – recruited Intelligent Investments to bid on and obtain the contract as the primary contractor, because Company A did not qualify. The indictment alleges that Gonzales and Company A agreed that he would perform little, if any, work on the contract. Instead, Company A would perform virtually all the work on the contract using its own resources and subcontractors, which were not local. Gonzales and Company A allegedly agreed to split the net profits received from claims under the contract, with Company A to receive substantially more than half of the net profits.
The indictment charges Gonzales with one count of conspiracy to defraud the United States, three counts of making a false claim, three counts of disaster fraud and three counts of making and using a false document.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Randall D. Eggert. It was investigated by the U.S. Army Criminal Investigation Command – Major Procurement Fraud Unit, the Defense Contract Audit Agency, the Defense Criminal Investigative Service, the Department of Homeland Security – Office of Inspector General, the FBI and the Joplin, Mo., Police Department.