A suburban Chicago medical supply company owner was found guilty on Monday for his role in a scheme that involved paying kickbacks to a U.S. Department of Veterans Affairs employee. According to federal prosecutors. Darren A. Smith, 59, from Hazel Crest, Illinois, was convicted of eight counts of wire fraud after a week-long trial, with each count carrying a potential prison sentence of up to 20 years.
The trial, which took place at the U.S. District Court in Chicago, brought to light how Smith, the operator of a Bolingbrook-based medical distribution company, worked in cahoots with the Veterans Health Administration Prosthetics Service procurement clerk in Chicago. Together, the pair manipulated the procurement system to favor rentals over outright purchases, despite VA physicians' instructions to purchase the equipment, resulting in over $1.3 million in overpayments from the VA between 2017 and 2020, all while the procurement clerk banked at least $220,000 in kickbacks from Smith. U.S. District Judge Edmond E. Chang has scheduled Smith's sentencing for Sept. 10, 2024.
The government's case against Smith was built on evidence showing that the VA spent upwards of $2.7 million on orders placed with Smith's company — orders that were not only unnecessary but also priced higher than warranted. The procurement clerk involved, Andrew Lee, age 68 of Chicago, had already pleaded guilty to a wire fraud charge prior and now awaits sentencing.
Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, along with Gregory Billingsley, special agent-in-charge of the Department of Veterans Affairs Office of Inspector General, Central Field Office, announced the conviction. The prosecution was led by Assistant U.S. Attorney Heidi Manschreck and Special Assistant U.S. Attorney Benjamin Christenson, they described the conviction as a significant step toward holding those accountable who attempt to defraud government agencies intended to serve veterans.
