A parking lot manager cheated the VA out of $11 million, then bought all this crazy stuff

gettyimages 75960147 A parking lot manager cheated the VA out of $11 million, then bought all this crazy stuff

A crest of the Federal Bureau of Investigation is seen 03 August 2007 inside the J. Edgar Hoover FBI Building in Washington, DC. AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)

by Abigail Hartley

Richard Scott thought he had it all figured out.

His company, Westside Services LLC, owned and operated several different parking garages on the campuses of the VA Greater Los Angeles Healthcare System (VA GLAHS). They were minimally staffed, so most of the parking fees came right back into the company. He was already a rich man, but clearly, he wanted more.

His main problem was his contract with GLAHS: for the privilege of operating parking facilities on VA land, he was obligated to give 60% of his gross profits to Veterans Affairs. To determine how much he owed them each year, he had to turn his books over to the VA so they could see the cash flow in and out of his business. It was a tight leash to be on, but he soon found a way to wriggle out of it—he started bribing the VA official in charge of overseeing his contract.

With his VA watchdog out of the way, he started keeping at least two sets of books: one set for the VA, and one “real” set maintained by his accountant. The VA’s version of his finances showed him with much lower revenue and much, much higher expenses than his personal books reflected.

“The investigation has revealed that Scott underreported revenue to the VA by a minimum of $4,689,081 and over-reported expenses to the VA by a minimum of $8,219,762, which caused a direct loss to the VA of $11,397,779,” the FBI affidavit for Scott’s case read. The Department of Justice press release also reported that the $11 million figure only included money that existed on paper—they estimate that as much as $1 million in cash income went unreported from UCLA game-day parking alone.

After fifteen years of Scott cheating the federal government out of money, the VA official he’d been bribing began cooperating with authorities, and the hammer came down on the whole operation. What does fifteen years of ill-gotten gains look like? Here’s just a sample of what the DoJ found he spent the money on:

  • three condos in Santa Monica, valued at $2.5 million each
  • a Cigarette Top Gun racing boat, which is docked in Miami for some reason
  • three Ferraris
  • a 1969 Corvette L88
  • two Mercedes-Benzes
  • a Shelby Super Snake Mustang
  • $740,000 in travel business expenses
  • $413,000 in food and entertainment business expenses
  • a personal salary of over $3 million a year

“The travel and meal/entertainment expenses are especially suspicious because the business of WSS consisted of overseeing parking lots at the VA GLAHS, only two of which were regularly staffed, which did not require any travel beyond the few mile area,” the affidavit added.

If he’s found guilty of fraud against the VA, Scott could spend up to ten years in prison. The DoJ is already in the process of seizing his assets as the investigation continues.

 

 

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