Bail Denied for Westside Parking Lot Operator Charged with Swindling VA Out of $11.4 Million

0
385
bail bond company accused of

Bail was denied Thursday for a Westside man charged with swindling the U.S. Department of Veterans Affairs out of $11.4 million over the last 10 years and bribing a federal official who later became a government informant.

Richard Scott, 58, of Santa Monica is accused of keeping two sets of books to hide revenue from several parking lots his Westside Services LLC company operated at the Veterans Affairs Medical Center in West Los Angeles. He was arrested Wednesday on a federal criminal complaint charging him with major fraud against the United States, a felony carrying a possible prison term of up to 10 years.

After hearing arguments from a federal prosecutor and Scott’s attorney, U.S. Magistrate Judge Steve Kim denied bail, finding no conditions on offer were sufficient to ensure the defendant’s appearance for future court dates.

Kim said that Scott’s lack of bail resources in light of the length of potential incarceration if he’s convicted, and a “notable absence” of close family, helped convince him to order Scott detained pending future proceedings.

“Every single penny that he has is either not available to him or has been taken by the government,” defense attorney Michael Proctor told the judge.

In arguing for detention based on risk of flight, Assistant U.S. Attorney Ruth Pinkel told the judge that when investigators served a search warrant on Scott’s home, they found about $200,000 in cash, including $25,000 and a passport in what she termed a “go bag” — which she suggested could be used for a quick departure. In addition, Pinkel said that an informant had claimed that Scott once spoke of a plan to flee to Costa Rica if authorities got too close.

According to the complaint, Scott’s company obtained a contract to operate parking lots on the campuses of the VA Greater Los Angeles Healthcare System, and soon after began defrauding the VA by failing to properly report income and expenses.

For the past 15 years, Scott’s contract required him to provide the VA with 60 percent of the gross revenues from the parking lots, and he was required to submit annual reports detailing revenue generated by parking fees, as well as improvements and services his company provided that could be used to offset payments due to the VA, according to court documents.

The investigation determined that Scott kept two sets of books, one that contained false revenue and expense statements, and a second set that contained actual revenues and expenditures, aside from unreported cash, federal prosecutors allege.

As part of the scheme, Scott began bribing then-VA contracting official Ralph Tillman, who was responsible for overseeing the contract in 2003, and continued to bribe him on a regular basis until Tillman abruptly retired in 2014 after he was confronted by federal agents, prosecutors allege.

Prosecutors said Scott continued making payments to Tillman — who has not been charged — to continue the scheme and attempt to avoid termination of his contract. Tillman is cooperating with the government and helped investigators tape record allegedly incriminating conversations with Scott, Pinkel said.

Scott allegedly used the money to buy three $2.5 million condominiums in Santa Monica, various high-end collectible cars, a Malibu home and a Cigarette racing boat docked in Miami. Pursuant to court orders, federal authorities have begun to seize the boat, three Ferraris, a 1969 Corvette, two Mercedes-Benzes and a high-performance Mustang, prosecutors said.

“I’m not confident we’ve found everything,” Pinkel said.

Summary
Bail Denied for Westside Parking Lot Operator Charged with Swindling VA Out of $11.4 Million
Article Name
Bail Denied for Westside Parking Lot Operator Charged with Swindling VA Out of $11.4 Million
Description
Bail was denied Thursday for a Westside man charged with swindling the U.S. Department of Veterans Affairs out of $11.4 million over the last 10 years and bribing a federal official who later became a government informant.
Author