The Department of Veterans Affairs VA Hospital in Los Angeles. Photo by John Schreiber.
A parking lot operator is expected to plead not guilty Thursday to federal charges of swindling the U.S. Department of Veterans Affairs out of $11.4 million over the last 10 years and bribing an 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 indicted last week on 15 felony counts alleging conspiracy, major fraud against the United States and other charges.
According to the U.S. Attorney’s Office, 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 record allegedly incriminating conversations with Scott, according to Assistant U.S. Attorney Ruth Pinkel.
Scott allegedly used the money to buy a Malibu beach house, three $2.5 million luxury condominiums in Santa Monica, various collectible cars, and a Cigarette racing boat docked in Miami. Pursuant to court orders, federal authorities have begun to seize the boat, three Ferraris, a rare 1969 Corvette, two Mercedes-Benzes and a high-performance Mustang, prosecutors said.
“I’m not confident we’ve found everything,” Pinkel said.
At a detention hearing last month, Pinkel told the judge that when investigators served a search warrant at 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 have been 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.
Scott was subsequently ordered jailed pending trial.
—City News Service
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