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Indictment details $4 million construction fraud at Bay Pines VA cancer center

Four men are accused in a scheme that compromised construction of cancer treatment center at the St. Petersburg veterans hospital.
 
The C.W. Bill Young VA Medical Center Campus, part of the Bay Pines VA Healthcare System.
The C.W. Bill Young VA Medical Center Campus, part of the Bay Pines VA Healthcare System. [ Times (2014) ]
Published Dec. 1, 2023|Updated Dec. 3, 2023

TAMPA — A grand jury returned an indictment this fall accusing four men of perpetrating a fraud scheme that compromised construction of a cancer treatment facility at the Bay Pines Veterans Affairs Medical Center in St. Petersburg. The fraud, prosecutors say, ripped off taxpayers for more than $4 million.

The alleged scheme took advantage of a federal law designed to give preference to businesses owned by disabled veterans in the awarding of government contracts. The men are accused of using a veteran-owned company as a front to obtain a construction contract for the cancer center.

The indictment alleges the company submitted a proposal to do the work that contained false statements and omissions. It alleges that two other companies were involved in the actual construction and received much of the money.

Matthew West, Kevin Kutina, Roberto Gonzalez and William Gonzalez are accused of conspiracy to commit wire fraud, among other charges.

Attorneys for two of the defendants, when reached Thursday, denied the allegations and pointed back at the government.

“We believe the genesis of the problem here lies in the government breaching the contract,” said Juan Gonzalez, an attorney for Roberto Gonzalez, whose company, Maxon Group LLC, is at the center of the case. He declined to comment further as the case is pending. He noted that his client is a veteran who served three years as an Army Ranger.

West’s attorney, Latour “LT” Lafferty, said his client’s company, West Construction LLC, worked to successfully complete the construction project. He said the company “respectfully disagreed” with a decision to terminate the contract before construction was complete and to demolish the facility.

“It is very unfortunate that this administrative matter has been criminalized, and West Construction Inc. denies the allegations,” Lafferty said. He added that the company acted with “full transparency” and expects an amicable resolution.

Attorneys for Kutina and William Gonzalez did not return calls for comment Thursday.

The allegations center on a contract to build the Cancer Infusion Therapy Center at the Bay Pines VA hospital. The 14,909-square-foot building was an expansion of the hospital’s existing radiation oncology clinic, enabling more veterans to receive cancer treatment there.

The center’s construction was the subject of a request for proposals that the VA issued in 2016. The contract was one that was only available to businesses owned by service-disabled veterans. Federal laws passed in the late 1990s and early 2000s created a program aimed at helping disabled veterans by giving them priority for such contracts.

There are strict requirements for businesses that wish to take advantage of the program. Ineligible companies sometimes get around those requirements through what’s known as a pass-through scheme, according to federal prosecutors. It works essentially by having an eligible company obtain a contract through the program, then passing the work and most of the benefits to an ineligible company.

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That’s exactly what happened, federal prosecutors say, with the contract to build the cancer center.

Roberto Gonzalez submitted a proposal for Maxon Group LLC, of Miami, to construct the center at a cost of $8,929,202, the indictment states. The contract was awarded to Maxon, which qualified as a small business owned by a service-disabled veteran.

The indictment alleges that Maxon acted as a pass-through company for West Construction LLC. It was West that actually managed the VA project and collected most of the payment for it, the indictment alleges.

Based in Lantana, in Palm Beach County, the company is a fourth-generation architectural and construction firm, West’s attorney said. It has handled projects in Florida, Africa and throughout the Caribbean, but it was not owned by a service-disabled veteran, according to the indictment.

Maxon also teamed with Kutina’s company, Kevcon Inc., to demonstrate the necessary technical experience to complete the project, the indictment states. Maxon’s proposal stated that three Kevcon employees would help oversee the project, but the people it named were not actually employed by the company and one of them was dead, according to the indictment.

The three companies shared employees, the indictments alleges, which was also not disclosed to the VA.

From 2017 to 2019, the government paid Maxon about $4.8 million, prosecutors said. In the same period, the company paid about $4.2 million of those funds to West, which in turn gave about $1.1 million to Kevcon.

If convicted of the most serious charges, the men could face as much as 20 years in prison.

A spokesperson for the Bay Pines VA Healthcare System, Medina Ayala-Lo, said in a statement that news of the indictment was “disheartening.” But she noted that the services the Therapy Center was to provide are already available in the main C.W. Bill Young VA Medical Center, and the construction project did not affect the oncology services the hospital already provides.

“The completion of the (Therapy Center) would have moved oncology services out of the main hospital, at which point the vacant space would be renovated to enhance dialysis care,” Ayala-Lo said. “Even without the increase in space, Bay Pines VA continues to provide high-quality dialysis care to those we serve. The relocation of the dialysis treatment has been delayed as we continue to strategically examine our projects to ensure they meet Veterans’ care needs.”