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Special Investigation: Alleged scams persist in VA program for disabled veterans

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In 2007, Douglas Fleming, a severely disabled veteran, says he was thrown a life line.

"I never heard of anything, anything that would help veterans change their lives," Fleming said.

He began participating in the U.S. Department of Veterans Affairs "Veterans First" contracting program through his small construction business, Douglas P. Fleming LLC. The program sets aside government contracts to be awarded only to businesses owned by veterans, with preference to businesses owned by veterans who were disabled in the line of duty.

"I put it in front of a couple other vets and to the man, they said hey, this can change lives. This can change our lives. This gives us hope," Fleming said.

Fleming says his hope turned to despair when he encountered competition from companies that weren't controlled by veterans at all. Fleming says one such company is Legion Construction out of Chelmsford, Massachusetts.

In 2012, Legion's owner, David Gorski, was indicted for, "a scheme to subvert a program designed to provide business opportunities for service disabled veteran owners of small construction companies," according to the Boston U.S. attorney. In other words, the indictment alleges that between 2006 and 2012, Gorski convinced disabled veterans to serve nominally as president of the company, while the whole time Gorski was really in charge. During that time, Legion was awarded more than $160 million in VA contracts, according to USAspending.gov.

Legion is not the only company that has been indicted for "misrepresenting" itself to the federal government in recent years. According to the website for the VA Office of the Inspector General, 11 companies were indicted for similar allegations between 2011 and 2013. Court documents and public record on USAspending.gov show that in total, those companies were awarded more than $284 million in federal contracts.

The VA Office of the Inspector General reports it has prosecuted many such companies between 2008 and 2013, resulting in a meager, "$10 million in fines and court ordered forfeitures."

Fox CT spoke with Tom Leney, the executive director of the VA's office of small and disadvantaged business utilization. Leney said the process to verify companies before they are awarded VA contracts is thorough. "They have to submit a range of business documents ranging from tax returns, to operating agreements, to bylaws, to board minutes, to 20 cancelled checks," Leney said.

As for the indictments, Leney argued that the VA did not start doing serious audits of potentially fraudulent companies until 2012.

Connecticut Sen. Richard Blumenthal told Fox CT that the program needs better oversight before companies are awarded federal contracts. "As many of these scams have been investigated and some prosecuted, there's a need for heightened scrutiny on the front end before they are given any federal funding," Blumenthal said.

Fox CT reached out to Legion Construction for comment twice but never heard back.

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