For years, local, state, and even federal government organizations in the United States have given preferential treatment to veteran-owned businesses. In some cases, they even have contracts which they will only fill with veteran-run businesses. Sometimes, those contracts even specify that they are for service-disabled veterans.
Every so often, some scumbag gets it into their mind that they can abuse the system and create a fake ‘veteran-owned’ business so that they can get contracts and make money. In this case, said scumbag used his father’s honorable military service to cash in.
Even more interesting, though, is that the fraud, in this case, was perpetrated by a former football player from Brigham Young University. Stanley Raass of Lehi, Utah, created a company and lied about its leadership and ownership stakes.
You see, in order to apply for these ‘veteran-owned’ contracts, a business must be 51 percent owned by a veteran or veterans.
In the case of service-disabled veteran contracts, the business must be 51 percent owned by a service-disabled veteran. Further, the service-disabled veteran must “manage the daily operations” of the business.
Stanley Raass began a business called Raass Brothers, Inc., a construction company that provided a laundry list of ‘general’ construction services to the federal government under contracts.
However, in 2009, Stanley Raass founded another company, RWT.
R, W, and, T are the initials of Raass’ father-in-law, who is a service-disabled veteran with a 100% disability rating from the VA.
Raass’ father-in-law, who is alleged to be incapable of operating a business due to his disabilities, is listed as both the President and Majority Shareholder (or Majority Owner) of RWT.
From September 2009 until August 2013, Raass, using the RWT company name and obviously false claims of its leadership, managed to attain 11 contracts that were meant for service-disable and veteran-owned small businesses.
Those contracts were worth more than $16.5 MILLION dollars in total, according to statements made by the local U.S. Attorney for Utah.
On Tuesday, February 13, 2018, Stanley Raass was convicted after pleading guilty to wire fraud and money laundering charges.
After pleading guilty in front of the court, Raass’ sentencing hearing was set for May 23, 2018, more than three months after the conviction.
According to legal observers, it is likely that Raass will end up spending as long as two years in a federal prison.
He is also said to be likely to be fined a whopping $64,000 for his fraudulent activities. In other words, Raass while be making about $8 million for each year he spends in prison, paying only a pittance in fines.
Special Agent in Charge Tara Sullivan of the Las Vegas field office pointed out that Raass worked quite hard to “create an elaborate scheme with no other purpose than defrauding the government and other disabled veterans for his own personal gain.”
This is not the first time that Raass has been in trouble with law enforcement, however.
He was arrested in 2015 for allegations of domestic violence. Rather than risk a serious punishment, he took an abeyance in a Lehi court and pled guilty to having committed misdemeanor assault.
The claims of assault caused him, however, to resign from a volunteer assistant football coach position he took at Pleasant Grove High School.
Raass had a somewhat promising career in college at BYU as a linebacker, but it never went anywhere, and he only played in the 1994-95 season.
The fraud that Raass committed is doubly troubling.
To begin with, it showcases that the federal government really doesn’t put forward much effort to verify who they are contracting with on expensive federal contracts.
With 11 contracts totaling $16.5M, you’d think that the federal government could at least spend a few seconds checking out the company they selected. Instead, they did nothing, and it took almost a decade to catch a fraud.
Secondly, it shows that the government is hardly concerned with recovering the money that was fraudulently taken from them by a phony ‘service-disabled veteran-owned’ business.
The person who received contracts which he was not qualified for is being fined not even a full percentage point of the money he took.
In fact, $64,000 represents slightly less than 0.4% of the money Stanley Raass fraudulently received.
So, the government doesn’t seem to be interested in recovering money that was meant for service-disabled veterans, or in handing out a real punishment for the person who walked away with it.
If the government wants to stop people from defrauding them, they need to actually punish them, not give them a slap on the wrist and almost no fine.