Arlington CEO Pleads Guilty In Protective Gear, PPP Fraud Schemes

ALEXANDRIA, VA — An Arlington-based CEO pleaded guilty Wednesday in Alexandria federal court in a personal protective equipment scheme that defrauded federal agencies.

According to court documents, Robert S. Stewart, Jr., 35, was the owner and president of Arlington-based Federal Government Experts and was accused of making false statements to multiple federal agencies to fraudulently obtain multimillion-dollar government contracts, COVID-19 emergency relief loans, and undeserved Veterans Affairs (VA) military service benefits. He pleaded guilty to making false statements, wire fraud, and theft of government funds.

Prosecutors say Stewart made false statements to the Federal Emergency Management Agency (FEMA) and the Department of Veterans Affairs to obtain contracts to provide COVID-19 PPE. Stewart falsely claimed to procurement officials from FEMA and the VA that he had large quantities of PPE, including N95 masks. The VA and FEMA awarded FGE contracts valued at $35,000,000 and $3,510,000, respectively. The VA intended to use the PPE for employees and patients at various Veterans Health Administration facilities, which serve the medical needs of over nine million veterans annually.

Stewart's company Federal Government Experts did not supply any PPE to the VA and FEMA, prosecutors say. The federal government experienced no financial loss because the contract called for payment upon delivery and inspection of the goods.

"Stewart’s fraudulent conduct during a critical time in our Nation’s fight against COVID-19 undermined the government’s ability to provide much needed PPE to the community, including to the front-line health care workers serving our military veterans," said Raj Parekh, the acting U.S. attorney for the Eastern District of Virginia. "In addition, by fraudulently obtaining government-backed loans intended to be lifelines to keep businesses afloat, Stewart unlawfully took and misused resources devoted to help struggling Americans."

Prosecutors say Stewart also fraudulently obtained loans under the federal Paycheck Protection Program and the Economic Injury Disaster Loan Program on behalf of Federal Government Experts. Both programs were intended to be emergency financial assistance to millions of people experiencing economic challenges related to the COVID-19 pandemic. The loan applications submitted by Stewart falsely overstated the number of FGE employees and the amount of FGE’s payroll. Stewart used some of the loan proceeds for personal expenditures rather than to pay employees or for other appropriate business expenses, according to prosecutors. The loss to the U.S. government from this fraud is approximately $261,500.

Stewart also falsely claimed to the VA to be entitled to veteran’s benefits for serving in the U.S. Marine Corps. He is an Air Force veteran but never served in the Marines. Prosecutors say he created fraudulent documents saying he attained the rank of Corporal in the Marine Corps and was honorably discharged after receiving several awards and commendations. His excess benefits were in the amount of $73,722.45.

"By falsely claiming to have served in the U.S. Marine Corps to unlawfully increase his veteran’s benefits, Stewart stole money dedicated to providing resources and services to American military veterans and their families. This was an affront to those who honorably served,"said Parekh.

Stewart's sentencing is scheduled for June 16. He faces up to 35 years in prison.