When the economy slowed down and construction jobs started drying up, Warren K. Parker had an idea for getting more business.
Pretend to be a wounded war hero, create a company called Silver Star Construction and bid on jobs reserved for companies owned by true service-disabled veterans, narrowing his pool of competing bidders. For a while, the plan worked, nabbing Parker multiple million-dollar construction contracts — including three at Fort Leavenworth.
That’s how U.S. Attorney Barry Grissom described Parker’s scheme on Thursday, when he announced that Parker and three others had been indicted on charges of defrauding a federal program that uses stimulus money to help companies owned by wounded veterans.
“These contracts are supposed to go to genuine service-disabled-veteran-owned small businesses, not to impostors who break the rules and scheme to beat the system,” Grissom said. “If we fail to hold these firms accountable we will be sending a message to unscrupulous members of the contracting community that there is no punishment and no penalty for abusing the program.”
Grissom said the government would demand the defendants repay $6.8 million in fraudulently obtained revenue, and authorities began by freezing bank accounts Wednesday night.
“At some point we’re going to get every nickel and dime,” Grissom said.
Silver Star Construction maintained offices in Blue Springs, Mo., and the Stilwell community of Johnson County, according to the indictment.
Parker, 69, his wife, Mary, 66, and his son Michael, 37, all of Blue Springs, Mo., stand charged with crimes including conspiracy, fraud and money laundering.
Also charged is Leawood resident Thomas J. Whitehead, 59, who is the majority owner of Phoenix Building Group Inc. and claimed he worked for Silver Star Construction, which authorities described as a pass through, or front, company for Phoenix Building Group.
Silver Star Construction obtained more than 10 contracts from the Veterans Administration and from the Department of Defense from 2008 to 2010, according to the indictment.
The Leavenworth contracts were awarded Nov. 16, 2009, in the amount of $1.3 million; Nov. 23, 2009, in the amount of $1.2 million; and Dec. 23, 2009, in the amount of $1.2 million. Grissom said he did not know specifics about the projects.
Parker’s concocted war-hero persona was over the top.
Parker claimed he was a major in the Army who had completed three tours of duty in Vietnam, the indictment said. He claimed he was awarded three Silver Stars, the Legion of Merit, four Bronze Stars with Valor, 11 Air Medals with Valor and 300 hours of combat air time, three Purple Heart Medals, a Presidential Citation, a U.S. Army Citation, Combat Infantryman’s Badge, Vietnam Service Medal with 79 Battle Stars, and more than 32 Citations for Heroism.
In reality, Grissom said, Parker served five years in the Missouri National Guard and never left the state on active duty. He was honorably discharged in 1968 as an equipment mechanic, and the only decoration he received was an expert shooting badge.
Grissom said a background check revealed Parker’s lies, but he would not say how authorities were tipped off.
A 2009 Government Accountability Office report found widespread fraud and abuse in the Service-Disabled Veteran Owned Small Business Program, Grissom said. He said the report made it obvious that relying on applicants’ presumed “honor and integrity” wasn’t enough.
Grissom said the indictment unsealed Thursday was the first of its kind in Kansas.
“The victims are the legitimate service-disabled veterans and their firms,” he said. “This prosecution is part of the effort to protect them by tightening controls to prevent fraud and abuse.”
The defendants were arraigned shortly before the press conference and have been released, he said. They face up to 30 years in prison for conspiracy to defraud the government, plus additional years for other fraud and conspiracy convictions.