Mercer County, New Jersey Woman Sentenced to 37 Months in Prison for Paying $671,000 in Bribes to Fraudulently Obtain Government Construction Contracts
TRENTON, NJ—A Hopewell, New Jersey, woman was sentenced today to 37 months in prison for bribing a former Department of Veterans Affairs (VA) supervisory engineer at the VA’s campus in East Orange, New Jersey, in order to fraudulently obtain $6 million in construction contracts, including those reserved for service-disabled, veteran owned small businesses, U.S. Attorney Paul J. Fishman announced.
Donna Doremus, 47, previously pleaded guilty before U.S. District Judge Mary L. Cooper to three counts of a four-count information charging her with one count of bribing a public official, one count of conspiracy to defraud the United States and two counts of making and subscribing to false federal tax returns. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
The bribes were paid in connection with VA contracts awarded to companies Doremus owned. She also admitted to a conspiracy to defraud the United States by falsely representing that one of her companies was owned and controlled by a service-disabled veteran.
From 2007 to July 2012, Doremus paid approximately $671,000 in bribes to a former VA official, Jarod Machinga, 45, also of Hopewell, in connection with VA contracts awarded to three companies she owned and controlled. In his position as a supervisory engineer, Machinga had the authority and influence to direct certain VA construction contracts to particular companies. Machinga directed more than $6 million of VA construction projects to Doremus’ companies.
One of Doremus’s companies, Tyro General Construction (Tyro), entered into a service-disabled, veteran-owned small business contract with the VA. Congress has established a program whereby certain VA contracts are reserved for small businesses that are owned and controlled by service-disabled veterans. Doremus conspired with Machinga to falsely represent to the VA that Tyro was a service-disabled, veteran-owned small business so that Tyro could improperly obtain a lucrative construction contract from the VA. Machinga then used his official position and influence at the VA to award such a contract to Tyro. In total, Tyro was paid more than $3 million by the VA in connection with this service-disabled veteran-owned contract.
For tax years 2009 and 2010, Doremus falsely reported that certain bribe payments she made to Machinga, as well some personal expenditures, were her companies’ business expenses. As a result, she failed to pay $250,374 in federal income taxes that she owed the IRS.
In addition to the prison term, Judge Cooper ordered Doremus to serve one year of supervised release. Restitution will be determined at a hearing on Aug. 26, 2015. As part of her plea, she agreed to a forfeiture money judgment of $671,975.
On Sept.18, 2013, Machinga pleaded guilty before Judge Cooper in connection with his accepting kickbacks from Doremus and engaging in a scheme to defraud the VA. He was sentenced to 46 months in prison on June 30, 2015.
U.S. Attorney Fishman credited special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Jeffrey Hughes; the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division and Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.