VIEW INDICTMENT

KANSAS CITY, KAN. – The owner of a Missouri construction company has been indicted on charges of defrauding a federal program that sets aside federal contracts for businesses owned by service-disabled veterans, U.S. Attorney Barry Grissom said today.

The indictment alleges Warren K. Parker, 69, Blue Springs, Mo., obtained more than $6 million in federal contracts, in part by falsely claiming to have a service-connected disability. The contracts were awarded under the Service-Disabled Veteran Owned Small Business Program.

The indictment alleges that in documents submitted to the U.S. Department of Veteran's Affairs in support of Silver Star Construction, LLC in connection with contracts under the Service-Disabled Veteran Owned Small Business Program, he falsely claimed to have reached the rank of major in the U.S. Army, completed three tours in Vietnam, to have been awarded three Silver Stars, the Legion of Merit, four Bronze Stars with Valor, eleven Air Medals with Valor (claiming 300 hours of combat air time), three Purple Heart Medals, a Presidential Citation, a U.S. Army Citation, Combat Infantryman's Badge, Vietnam Service Medal with (79) Battle Stars and to have been Awarded over (32) Citations for Heroism. According to federal records, Parker served five years in the Missouri National Guard, never left the state of Missouri on active duty and was honorably discharged in 1968 as a Senior Engineer Equipment Mechanic with the rank of Specialist E-5.The only decoration he received was an expert shooting badge. Warren K. Parker was never classified as a service-disabled veteran by the U.S. Department of Veteran's Affairs VA or the Department of Defense.
"These contracts are supposed to go to genuine service-disabled veteran owned small businesses, not to imposters who break the rules and scheme to beat the system," Grissom said. "If we fail to hold these firms accountable we will be sending a message to unscrupulous members of the contracting community that there is no punishment and no penalty for abusing the program."

Grissom cited a 2009 report by the Government Accountability Office that found widespread fraud and abuse in the Service-Disabled Veteran Owned Small Business Program.

"The victims are the legitimate service-disabled veterans and their firms," Grissom said. "This prosecution is part of the effort to protect them by tightening controls to prevent fraud and abuse."

Warren Parker is charged with one count of conspiracy to defraud the government, four counts of major program fraud, eight counts of wire fraud, one count of money laundering, and two counts of making false statements.

Parker's company, Silver Star Construction, LLC, was incorporated in Missouri, with offices in Blue Springs, Mo., and Stilwell, Kan. The indictment alleges that Silver Star Construction acted as an illegal pass-through company for Phoenix Building Group, Inc., which was incorporated in Kansas, with Thomas J. Whitehead as a majority owner.

Also in charged in the indictment are:

Mary K. Parker, 66, Blue Springs, Mo, Parker's wife, who is charged with one count of conspiracy, four counts of major program fraud, eight counts of wire fraud and one count of conspiracy to commit money laundering.
Michael J. Parker, 37, Blue Springs, Mo., Parker's son, who is charged with one count of conspiracy, four counts of major program fraud, eight counts of wire fraud, one count of conspiracy to commit money laundering and two counts of making false statements.
Thomas J. Whitehead, 59, Leawood, Kan. who claimed he worked for Silver Star Construction and who is the majority owner of Phoenix Building Group, Inc., is charged with one count of conspiracy, four counts of major program fraud, eight counts of wire fraud and one count of conspiracy to commit money laundering.

Silver Star Construction, LLC, the company, also is a defendant in the criminal indictment.

Among the contracts the indictment alleges Silver Star Construction, LLC received fraudulently are:

– A $1 million contract in Denver, Colo., awarded Sept. 15, 2009.
– A $1.3 million contract in Leavenworth, Kan., awarded Nov. 16, 2009.
– A $1.2 million contract in Leavenworth, Kan., awarded Nov. 23, 2009.
– A $1.2 million contract in Leavenworth, Kan., awarded Dec. 23, 2009.

Upon conviction, the crimes carry the following penalties:

Conspiracy to defraud the government: A maximum penalty of 30 years in federal prison and a fine up to $250,000.
Program fraud: A maximum penalty of 10 years on each count and a fine up to twice the loss to the government program.
Wire fraud: A maximum penalty of 20 years and a fine up to $250,000 on each count.
Conspiracy to commit Money laundering; A maximum penalty of 10 years and a fine up to $250,000.
False statements to government agents: A maximum penalty of five years and a fine up to $250,000 on each count.

The following agencies worked on the investigation: The Small Business Administration's Office of Inspector General; The Defense Criminal Investigative Service, the Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division and the General Services Administration's Office of Inspector General. Assistant U.S. Attorney Tris Hunt is prosecuting.

In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.

 

 

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