Shrewsbury Biz Falsely Claims $16.5M Contract Eligibility: Feds

SHREWSBURY, NJ - The Justice Department is suing a Shrewsbury company that allegedly defrauded the government by claiming eligibility for over $16.5 million in government contracts intended for service-disabled, veteran-owned small businesses, according to a statement from the U.S. Attorney’s Office.

According to an October court complaint, Shrewsbury’s VE Source LLC obtained contracts from the U.S. Department of Agriculture (USDA) and the Defense Logistics Agency (DLA), a component of the U.S. Department of Defense. Under the contracts, VE Source was paid to deliver fire-retardant coveralls for the U.S. Navy as well as aprons and apron strings to the USDA.

VE Source LLC and owners Sherman Barton and Chris Neary falsely claimed that the business was eligible for government contracts set aside for companies owned and controlled by service-disabled veterans, the Attorney’s Office said. The Shrewsbury owners previous certified that the company was controlled by Sherman Barton, a service-disabled veteran, when the company was in fact controlled by Christopher Neary, who is not a service-disabled veteran.

"By diverting contracts and benefits intended for businesses owned and controlled by service-disabled veterans towards an ineligible company, the defendants undercut the express congressional purpose in enacting laws intended to encourage the awards of federal contracts to [service-disabled, veteran-owned small businesses]," the U.S. Attorney's Office said in the statement.

According to officials, eligible small businesses must be both majority-owned by and controlled on a long-term and daily basis by service-disabled veterans.

Assistant U.S. Attorneys David V. Simunovich and Mark C. Orlowski of the U.S. Attorney’s Government Fraud Unit in Newark are representing the federal government in the case.

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