Federal Investigation Yields Multiple Convictions In Connection With Bribery Of Veterans Affairs Contracting Officer

SAN JOSE – Today, Justin Tolentino became the last of seven defendants involved in a Veterans Affairs (VA) contracting officer bribery scandal to be sentenced, announced United States Attorney Brian J. Stretch, FBI Special Agent in Charge John F. Bennett, and VA Office of Inspector General (OIG) Special Agent in Charge Michael Seitler.  The sentence brings to a close the five-year investigation into a bribery scandal pursuant to which former VA contacting officer, Tracy Marasco, accepted cash, trips, and gifts in exchange for steering million-dollar contracts to particular contractors.

In 2011, the VA OIG and the FBI began their probe into alleged corrupt contracting activities at the VA Medical Centers (VAMCs) in Palo Alto, Calif. and Sacramento, Calif.  Since then, the multi-year investigation resulted in the charging of seven individuals including one VA contracting officer, three VA contracting officer’s representatives, and three construction contractors.  With today’s sentence, all of the defendants have been convicted and sentenced.  The individuals charged and convicted in connection with the scheme include the following:

• Tracy Marasco, 49, of Modesto, pleaded guilty on February 21, 2014, to one count of Receipt of a Bribe as a Public Official, in violation of 18 U.S.C. §  201(b)(2)(A).  Marasco admitted using her position as a Veterans Affairs contracting officer to steer valuable construction and maintenance contracts to certain prime contractors in exchange for cash payments and gifts.  Marasco was indicted by a federal grand jury on May 4, 2011 and was charged with five counts of receiving bribes within her capacity as a public official, in violation of 18 U.S.C. § 201(b)(2)(A); and one count of making false statements to a government agency, in violation of 18 U.S.C. § 1001(a)(2).  Marasco admitted that between 2007 and 2010, she received tens of thousands of dollars in cash payments and two used cars from various private contractors and subcontractors.  In addition, during the same period, she received paid trips to Puerto Rico, Disneyland, and Las Vegas.  On June 6, 2016, she was sentenced by U.S. District Judge Edward J. Davila to six months in prison and an additional six months of home detention as a term of supervised release. 
• Xerxes “Ike” Zapata, a former Palo Alto VAMC contracting officer’s representative, pleaded guilty to one count of Receipt of a Bribe by a Public Official, in violation of 18 U.S.C. §  201(b)(2)(A).  Zapata admitted accepting cash, flight tickets, and payments to credit cards in exchange for steering construction and maintenance contracts to the benefit of those providing the bribes.  Zapata was sentenced by U.S. District Judge Edward J. Davila to 16 months in prison and a $25,000 fine.  
• Russell Allgire, a former Palo Alto VAMC contracting officer’s representative engineer, pleaded guilty to one count of Receipt of a Bribe by a Public Official, in violation of 18 U.S.C. § 201(b)(2)(A).  Allgire admitted accepting cash and car payments in exchange for steering construction and maintenance contracts to the benefit of those providing the bribes.  Allgire was sentenced by U.S. District Judge Edward J. Davila to a term of three years of probation with a term of 12 months of home detention and a $7,500 fine.
• Conrad Alfaro, a former Palo Alto VAMC contracting officer’s representative, pleaded guilty to one count of Receipt of a Gratuity by a Public Official, in violation of 18 U.S.C. §  201(c)(1)(B).  Alfaro admitted receiving roofing work on his home which was paid for by a VA general contractor while overseeing a Palo Alto VAMC project to install a new MRI scanner by the same VA general contractor.  Alfaro was sentenced by U.S. District Judge Lucy H. Koh to 5 years of probation with a term of 12 months of home detention, and a $25,000 fine. 
• Jack Stringer, a former VA contractor, pleaded guilty to one count of Providing a Gratuity to a Public Official, in violation of 18 U.S.C. §  201(c)(1)(A).  Stringer admitted that he provided cash and gifts to several VA employees, including entertainment tickets, gift cards, vacation packages, and the payment of credit card bills.  Stringer was sentenced by U.S. District Judge Edward J. Davila to a term of 3 years of probation and a special condition of eight months of home detention, and a $27,500 fine.
• Jacobo Herrera, a former VA contractor, pleaded guilty to one count of Providing a Gratuity to a Public Official, in violation of 18 U.S.C. § 201(c)(1)(A).  Herrera admitted providing cash payments, Disneyland Tickets, and hotel accommodations to VA officials.  Herrera was sentenced by U.S. District Judge Lucy H. Koh to a term of 3 years of probation and eight months’ home detention, and a $20,000 fine.
• Justin Tolentino a former VA contractor, pleaded guilty to one count of Providing a Gratuity to a Public Official, in violation of 18 U.S.C. §  201(c)(1)(A).  Tolentino admitted providing flight and hotel accommodations to a VA official on three occasions.  Tolentino was sentenced by U.S. District Judge Beth L. Freeman to a term of 3 years of probation, and ordered to pay a $5,000 fine.   

Assistant U.S. Attorneys Jeff Nedrow and Amber Rosen are prosecuting the case with the assistance of Susan Kreider.  The prosecution is the result of an investigation by the FBI and VA-OIG.