US contractors face jail after pleading guilty to ‘rent-a-vet’ scheme

Illustration by Denis Carrier
Two South Carolina men have pleaded guilty in federal court to charges of executing a fraud scheme against the US. They face maximum sentences of 10 years in prison and fines of $1m when they are sentenced in July.

Edward DiGorio, 65, and Edward Kessler, 68, were the owners of contractors Addvetco and Hi-Def Contracting, based in Pittsburgh, Pennsylvania.

The companies bid for contracts issued by the Department of Veterans Affairs (VA) that were “set aside” for small businesses owned and operated by service-disabled veterans.

Neither of them had served in the military, but they paid service-disabled veterans to represent themselves as the primary owners and operators of Addvetco and Hi-Def on documents submitted to VA for vetting.

Such a fraud is known as a “rent-a-vet” scheme.

Between 2007 and 2018, the businesses won 67 set aside contracts, 50 of which were valued at $1m or more.

DiGorio and Kessler pleaded guilty to sample charges that related to recent contracts, for which the defendants received more than $400,000 in profits.

The FBI and VA’s Office of Inspector General conducted the investigation that led to the prosecution of DiGorio and Kessler.

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