$7.6M Judgment Against Shrewsbury Company's False Veteran Claims: Feds

NEWARK, N.J. – A company based in Shrewsbury has agreed to pay $7.6 million under a consent judgment for its role in making false statements to obtain government contracts set aside for businesses owned by service-disabled veterans, the U.S. Attorney's office said Tuesday.

According to the government's October 2020 complaint, VE Source LLC, based in Shrewsbury; the company’s owners, Sherman Barton and Christopher Neary; and a related entity, Vertical Source LLC, defrauded the federal government by falsely claiming that VE Source was eligible for government contracts for companies owned by service-disabled veterans, a news release from the U.S. Attorney said.

The consent judgment was entered into by the company on July 21, according to the settlement agreement.

The claims settled by this agreement are allegations only, and there has been no determination of liability, the federal authorities noted.

VE Source LLC, according to its website, "manages global sourcing requirements of special use clothing, shelters and accessories for U.S. government entities and multiple foreign government clients."

According to U. S. Attorney Philip R. Sellinger, VE Source obtained contracts from the U.S. Department of Agriculture and the Defense Logistics Agency, a component of the U.S. Department of Defense, totaling more than $16.5 million. The complaint cites "conduct that occurred between June 15, 2012 through and including October 28, 2019."

By obtaining contracts for which they were ineligible, the government alleged that VE Source, Neary and Barton "undercut the express Congressional purpose in enacting laws intended to encourage the awards of federal contracts to businesses owned and controlled by service-disabled veterans," the news release said.

In the resolution announced Tuesday, VE Source agreed to a consent judgment for $7.6 million "in conjunction with its role," the news release said. The United States entered a separate settlement agreement with Neary, Barton and Vertical Source, under which Neary will pay $120,000, Barton will pay $75,000, and Vertical Source will pay $180,000 to resolve claims made in a civil lawsuit filed by the United States under the False Claims Act.

According to the settlement agreement:

"Neary, Barton, and VSI do not admit or deny liability for the covered conduct. This agreement is not a concession by the United States that its claims are not well-founded. Neary, Barton, and VSI agree not to make or permit to be made any public statement denying any of the covered
conduct or creating the impression that the covered conduct is without factual basis. By way of example only, Neary, Barton, and VSI may state that the matter was amicably resolved by way of a civil settlement agreement in which they have neither admitted nor denied liability for the covered conduct."

Sellinger credited special agents of the General Services Administration, Office of Inspector General, New York Field Investigations Office, under the direction of Special Agent in Charge Joseph Dattoria; the U.S. Department of Agriculture, Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Bethanne M. Dinkins; and the Defense Criminal Investigative Service, Northeast Field Office, under the direction Special Agent in Charge Patrick J. Hegarty, with the investigation leading to this resolution.

The government is represented by Assistant U.S. Attorneys David V. Simunovich and Mark C. Orlowski of the Health Care Fraud Unit in Newark.

Counsel for VE Source LLC, Christopher Neary, and Sherman Barton is Lee Vartan Esq., West Orange. Counsel for Vertical Source Inc. is William Katz Esq., King of Prussia, Pa.