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Contractor Heads to Jail After Defrauding the Government (Why Does This Keep Happening?)

Niyazz / shutterstock.com
Niyazz / shutterstock.com

Various government contracts are awarded to companies based on whether they are veteran-owned, minority-owned, and even female-owned. A contract shouldn’t be awarded to someone if they are none of those. Yet, one contractor was awarded over $340 million in contracts that are set aside for veterans and minorities.

Matthew McPherson is not a veteran. He’s also not a minority. So, how did he manage to get all of these contracts?

Well, the easy answer is that he committed fraud. Unfortunately, however, McPherson isn’t the only one guilty of committing such fraud. Every so often, you hear a story about this. Someone manages to get millions of dollars in government contracts because they worked the system.

Obviously, this means that the system is easily manipulated. There should be thorough background checks to make sure that the contractor is a veteran, a minority, or a female so that the money is being awarded to someone who is worthy.

That didn’t happen with McPherson, and he’s being sentenced to 28 months in prison without any chance of parole. And, he’s been ordered to pay back over $5 million from the proceeds that he made from his fraudulent little scheme.

U.S. Attorney Teresa Moore explained in a release that he not only “defrauded the government but cheated to get contracts.” She continued by saying “His greed and deception allowed him to enrich himself at the expense of disabled veterans and minority owners.”

Hopefully, McPherson will learn that crime doesn’t pay – and that should be a lesson to anyone else who was thinking about manipulating the system and stealing contracts out from disabled veterans and minorities.

There are a few other conspirators who have pleaded guilty to participating in the deception. They’re awaiting their sentencing later this year. They’re facing charges of wire and major program fraud, filing false tax returns, and even making false statements to the Department of Veteran Affairs.

McPherson’s scheme has been in play for a while. The Department of Justice says that it began back in 2009 when he founded the Zieson Construction Company with Stephon Zeigler. Zeigler is an African-American veteran who is service-disabled. However, Zeigler is only a “nominal owner,” and he never actually had run the company. He didn’t have any decisions about the company, either. So, he was basically an owner in name only so that McPherson could get the contracts.

McPherson wanted to gain access to as many contracts as he could. As a result, additional small businesses were set up so that he could access the work that was supposed to go to “small disadvantaged businesses.”

Ultimately, it all caught up to McPherson because the various businesses that were set up used the same employees, the same equipment…and were all conveniently located in the same building…one that was owned by an LLC being controlled by none other than McPherson himself.

The Department of Justice was more than happy to sentence McPherson to prison because they wanted to use him as an example. They wanted to send a clear message out to contractors who would consider “unjustly enriching themselves at the expense of our nation’s veterans.”

Shame, shame, shame.

Now, if we could just make sure that doesn’t happen in the future, that’d be great.