US contractors plead guilty to ‘rent-a-vet’ fraud

Image: United States Department of JusticeVectorization: Ali Zifan, Public domain, via Wikimedia Commons

Edward DiGorio Jr., 65, and Edward Kessler, 68, residents of Myrtle Beach, South Carolina, each pleaded guilty to two counts of fraud before United States District Judge William S. Stickman IV. Both DiGorio and Kessler formerly resided in Pittsburgh, Pennsylvania.

DiGorio and Kessler were the owners of two construction companies, Addvetco Inc., and Hi-Def Contracting Inc., operating in Pittsburgh, Pennsylvania.

They both bid on and acquired “set-aside” contracts issued by the United States Department of Veterans Affairs (VA) to small businesses owned and operated by service-disabled veterans of the U.S. military and pre-certified by the VA as Service-Disabled Veteran-Owned Businesses (SDVOBs).

But neither DiGorio nor Kessler had served in the military, nor were they service-disabled.

Instead, they paid service-disabled veterans to falsely represent themselves as the primary owners of the businesses.

During the period 2007 to 2018, Addvetco and Hi-Def were awarded 67 contracts that were intended for SDVOBs, 50 of which were valued at $1 million or more.

The two charges to which DiGorio and Kessler pleaded guilty relate to the two most recent contracts awarded to the companies, for which the defendants received more than $400,000 in profits.

Judge Stickman scheduled sentencing for both defendants for July 11, 2024. The law provides for a maximum total sentence of up to 10 years in prison, a fine of up to $1 million, or both, at each count. Under the federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.