BREAKING: Sham Veteran Co. Exec Guilty In $100M Scheme To Defraud Gov't

A federal jury in Boston on Wednesday found construction company owner and executive David Gorski guilty of fraud in a scheme to defraud the government of more than $100 million in contracts that were supposed to go to service-disabled veterans.

Gorski, who did not serve in the military, was accused of using real veterans as fake figureheads at Legion Construction to get contracting preferences. He was found guilty of conspiracy to defraud the government and four counts of wire fraud after a two-week trial.

The jury deliberated just two hours before convicting Gorski. 

Prosecutors said he enlisted the help of an elderly and ailing Korean War veteran who spent most of his days sleeping and watching television while Gorski called all the shots at Legion Construction.

Gorski’s attorneys unsuccessfully argued that the Chelmsford businessman tried his best to stay within ever-changing Service-Disabled Veteran-Owned Small Business regulations, hiring attorneys and accountants to straighten out the business. And despite federal rules that service-disabled vet businesses maintain control of the company, that word was never defined in legal documents, they argued.

His attorneys declined to comment after the verdict. Gorski will remain free on bail until his sentencing in September. 

The government is represented by William Bloomer and Carlos Lopez of the U.S. Department of Justice.

Gorski is represented by Tracy Miner and Seth Orkand of Demeo LLP.

The case is U.S. v. Gorski, case number 1:12-cr-10338, in the U.S. District Court for the District of Massachusetts. read more »

Prairie Meadows Casino points finger at IRS whistleblower

A whistleblower is believed to have prompted the Internal Revenue Service's action to revoke Prairie Meadows’ federal tax exemption, recorded conversations during a private meeting of the casino’s board reveal. The IRS won’t confirm or deny whether an informant is involved.

The Des Moines Register listened to tape recordings of those meetings last week after it protested the board's decision to close the meetings. Revocation of the casino's tax-exempt status could have far-reaching impacts across central Iowa, because the Altoona casino funnels millions of dollars each year to local governments and nonprofit organizations.

Whistleblowers stand to gain up to 30 percent of any additional tax or penalties the IRS collects as a result of the tipster’s information, IRS rules show. Prairie Meadows formed in 1989 with much assistance from Polk County. The county owns the property upon which the casino and racetrack is located, but the gaming operation operates as its own group/nonprofit organization. read more »

Louisiana Department of Natural Resources appeals $750000 whistleblower verdict

The whistleblower in a lawsuit against the Louisiana Department of Natural Resources (DNR) is disappointed that the state has opted to appeal the verdict that awarded him $750,000.

After the jury’s decision in December, a DNR spokesman reportedly said the jury could have been confused by the long, complex lawsuit. At issue was whether the agency retaliated against Dan Collins, a Baton Rouge landman, who reported environmental concerns about a project he was involved in.

“The jury wasn’t confused at all,” Collins told the Louisiana Record. “In my opinion, the jury did not believe the parade of witnesses that the state brought.”

Collins, who has been in the business for more than 35 years, was contracted by the agency to provide land, title and environmental research on land-related projects starting in 1998. In 2005, he was contracted for a Bayou Postillion dredging project in Iberia Parish, which was billed as an endeavor to improve water quality.

Two years later, he came across advertisements at a trade show for oil and gas prospects in the same area as the project. He said he started asking questions and a lack of answers sent up red flags in his mind. So he started digging into public records. He said he believed the water quality project was actually about oil and gas exploration for the benefit of private landowners and companies read more »

False claims act case against k-mart can proceed in sdil

K-Mart can’t argue that customers in its pharmacy discount programs belonged to an organization that qualified for lower prices than the government paid, Seventh Circuit appellate judges ruled in a case from Southern Illinois.

“We are given no reason to think that there was any meaningful selectivity for the people who joined K-Mart’s programs, and thus that they could be distinguished in any way from the general public,” Chief Judge Diane Wood wrote on May 27.

“Few of K-Mart’s customers would consider themselves as belonging to a particular group or members of a particular organization just because they accepted K-Mart’s offer of a discount.”

Plaintiff James Garbe, a former K-Mart pharmacist in Ohio, seeks 70 percent recovery for the U.S. government and 26 states under the False Claims Act. read more »

Lawmakers Demand DOD Explain Handling Of Whistleblowers

A bipartisan group of lawmakers said Tuesday they have asked a Pentagon watchdog to explain its efforts to investigate whistleblower reprisal claims involving the U.S. Department of Defense and its contractors, citing concerns over apparent “persistent, systemic” issues negatively affecting those investigations.

“We write to express our concerns regarding what appear to be persistent, systemic issues with the DoD OIG, and our hope that you will work diligently to help resolve them,” the lawmakers said.

These systemic issues include significant delays in investigations, a case management system that is neither fully reliable nor comprehensive, a lack of oversight over similar investigations carried out at IGs for each individual military service, and allegations of reprisal and misconduct within the DOD IG itself, according to the group. read more »

Antitrust Complaint More Than Holds Its Own, Dentists Say

A putative class of dentists are defending their claims of an antitrust conspiracy in New York federal court against the three largest distributors of dental supplies in the U.S., saying that their consolidated complaint should not be dismissed because it goes above and beyond what’s necessary.

The distributors — Henry Schein Inc., Patterson Companies Inc. and Benco Dental Supply Company Inc. — have argued that the three elements of the alleged scheme are merely isolated actions and that the plaintiffs haven’t sufficiently tied it all together. The seven plaintiffs, however, said in a filing posted Tuesday that they only need to allege a plausible conspiracy in the Second Circuit but have nonetheless provided direct evidence of how all three threads wove a conspiracy.

“The [consolidated complaint] is based upon specific facts uncovered through investigation, information provided by a whistleblower, confidential internal company documents produced in discovery, and even audio recordings of the conspirators’ own statements and admissions,” the dentists said. “It sets out with great specificity how the cartel members accomplished a long-running restraint of trade through an overarching conspiracy comprised of three interrelated, complimentary parts.”

Those three parts involved agreeing to fix and stabilize prices, engaging in group boycotts against any dental practice that dealt with distributors that charged less than the fixed price, and a “gentleman’s agreement” not to poach each others’ customers and sales representatives, the dentists said. read more »