Former executives of two Arlington-based government security contracting firms are facing jail time after pleading guilty to fraud.
Joseph Richards, 52, of Arlington and David Lux, 66, of Springfield were sentenced today to 27 and 15 months in prison respectively.
They pleaded guilty in March to conspiracy to commit major government fraud in a scheme that falsely portrayed their company as being minority-owned in order to win millions of dollars in contracts intended for “disadvantaged small businesses.”
Arlington resident Keith Hedman, 53, also pleaded guilty in the scheme and is awaiting a sentencing hearing scheduled for June 21. Federal prosecutors say Hedman formed the company Richards and Lux worked for, and also formed a second Arlington-based security contractor that obtained more than $31 million in contract payments under false pretences.
The second company qualified for disadvantaged status as part of the Small Business Administration’s Section 8(a) program — and thus was eligible for preferential treatment in government contracts — after Hedman, a former Marine, selected a Maryland woman to “serve as a figurehead owner.” The woman qualified for the program “based on her Portuguese heritage and history of social disadvantage.”
The Associated Press previously identified the two companies involved as Security Assistance Corp. and Protection Strategies Inc. Both have a listed address in an office building at 2300 9th St S., near Columbia Pike.
“In total, the scheme netted government contracts valued at more than $153 million,” the U.S. Attorney’s Office for the Eastern District of Virginia said in a press release today. The full press release, after the jump.
Flickr photo by Joe Gratz
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