{"id":69769,"date":"2021-10-21T19:56:01","date_gmt":"2021-10-21T19:56:01","guid":{"rendered":"https:\/\/one.sightlinemg.com\/airforcetimes\/uncategorized\/2021\/10\/21\/civilian-owned-company-that-won-millions-in-contracts-for-disabled-veteran-owned-businesses-will-pay-back-5-million\/"},"modified":"2026-08-08T14:55:03","modified_gmt":"2026-08-08T14:55:03","slug":"civilian-owned-company-that-won-millions-in-contracts-for-disabled-veteran-owned-businesses-will-pay-back-5-million","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/airforcetimes\/veterans\/2021\/10\/21\/civilian-owned-company-that-won-millions-in-contracts-for-disabled-veteran-owned-businesses-will-pay-back-5-million\/","title":{"rendered":"Civilian-owned company that won millions in contracts for disabled veteran-owned businesses will pay back $5 million"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">After receiving almost $21 million in contracts set aside specifically for service-disabled, veteran-owned businesses, the owners of a contracting company, who never served in the military, have agreed to pay nearly $5 million back to the government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">U.S. Attorney Trini E. Ross of the Western District of New York announced that Strock Contracting Inc. of Buffalo, NY, entered into a consent judgment with the United States for $4,752,000 in order to dismiss the claims against it, according to an Oct. 15 press release.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The announcement comes years after Strock Contracting Inc., owners Lee Strock and Kenneth Carter and former employee Cynthia Ann Golde, were first accused of fraud, unjust enrichment and violating the False Claims Act in 2015.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.justice.gov\/civil\/false-claims-act\">The False Claims Act<\/a> holds any person that knowingly submits false claims to the government in order to receive government benefits \u2014 such as Veteran Affairs benefits \u2014 will have to pay back up to double the government\u2019s damages, in addition to a $2,000 penalty for each false claim.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Prosecutors say Strock Contracting hid behind Veteran Enterprises Company (VECO) in order to receive millions of dollars worth of federal contracts from the Department of Veterans Affairs, the Air Force and the Army, that were intended for businesses owned and operated by service-disabled veterans.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In its complaint, the United States alleged that the company carried out this scheme by directing VECO to submit false certifications of eligibility to the government, which allowed Strock Contracting to obtain substantial profits on numerous federal contracts which should have been awarded to eligible companies, according to a press release. Strock Contracting allegedly profited from these contracts through phony loans, sham lease agreements, and other deceitful financial arrangements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In order to qualify for <a href=\"https:\/\/www.sba.gov\/contracting\/government-contracting-programs\/service-disabled-veteran-owned-businesses\">SDVO business<\/a> benefits, a service-disabled veteran must have a service-connected disability that has been determined by the Department of Veterans Affairs or Department of Defense, must unconditionally own 51 percent of the business, they must control the management and daily operations of the business and hold the highest officer position in the company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Veteran Enterprises Company was 51 percent owned by Terry Anderson, a veteran with service-connected disabilities. No individual claims of fraud were brought against Anderson.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, according to the complaint filed by the U.S. Attorney\u2019s Office, VECO was allegedly utilized as a pass-through company for Strock Contracting, meaning that its income and granted benefits went straight to owners Strock and Carter instead of through the IRS.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Neither Strock nor Carter were veterans with service-connected disabilities, and therefore Strock Contracting was not eligible for government contracts given to Service-Disabled, Veteran-Owned small businesses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Statements from the federal complaint also alleged that Strock and Carter specifically recruited Anderson in 2006 in order to form VECO and and then apply for recognition as a SDVO business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Aside from signing paperwork related to government contracts and attending meetings with government clientele, Anderson was also largely left out of the day-to-day operations of the company, according to federal court documents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The court documents detailed that Anderson, as the majority-owner, was not involved in the management of VECO employees nor the approval of subcontractors. Anderson even had to be let in to the VECO office building by Strock Company employees, including Golde, who handled VECO\u2019s finances.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, according to the federal complaint, Anderson received less than 5 percent of VECO\u2019s profits, which prosecutors alleged further showcased his lack of required ownership and involvement for SDVO business eligibility.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Strock filed for bankruptcy in July after Strock Contracting Inc. went out of business and spending years tied up in court over the claims of fraud levied against him by the government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Kenneth Carter, Strock\u2019s business partner who owned 19 percent of the company, died in 2015 after the initial civil complaint was filed by federal prosecutors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to an interview by <a href=\"https:\/\/buffalonews.com\/news\/local\/crime-and-courts\/federal-fraud-case-against-cheektowaga-contractor-settled-for-4-75-million\/article_0c3f9596-2eb7-11ec-bb41-8bb387594178.html\">The Buffalo News<\/a>, Strock claimed he had done nothing wrong, but that he would not continue to fight the charges against him.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI don\u2019t have any money. How can I continue fighting?\u201d he said. \u201cIt\u2019s a battle that no citizen in this country could ever win.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The plaintiffs and defendants filed the joint motion for entry of judgment and dismissal of claims in August 2020. Judge Frank P. Geraci Jr. ordered the judgment of $4,752,000 against Strock Contracting and dismissed all claims, with prejudice.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Assistant U.S. Attorney David Coriell of the Western District of New York and Trial Attorney Glenn Harris of the Civil Division\u2019s Commercial Litigation Branch prosecuted the case. Strock was represented by attorney Robert C. Singer.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The judgment comes years after Strock Contracting Inc., owners Lee Strock and Kenneth Carter and former employee Cynthia Ann Golde, were first accused of fraud, unjust enrichment and violating the False Claims Act in 2015 after receiving Service-Disabled, Veteran-Owned (SDVO) business contracts and benefits.<\/p>\n","protected":false},"author":7,"featured_media":62552,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":21,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[101,24,89,16,26,21],"tags":[],"coauthors":[3349],"class_list":["post-69769","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news-roundup","category-home","category-middle-column","category-news","category-newsletters","category-veterans"],"acf":{"subheadline":"","legacy_arc_id":"AEHFARITZNEKDLIQNNAQC6QYYY","arc_canonical_url":"\/veterans\/2021\/10\/21\/civilian-owned-company-that-won-millions-in-contracts-for-disabled-veteran-owned-businesses-will-pay-back-5-million\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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