United States Attorney's Office
District of Iowa
March 13, 2015
Omaha Contractor and Companies Sentenced for Fraud Scheme
DES MOINES, IA – On March 12, 2015, Omaha, Nebraska contractor Ram Hingorani, age 50, was sentenced by United States District Court Judge Stephanie M. Rose to 6 months in a half-way house as part of a sentence of two years of probation, after pleading guilty to Major Program Fraud in the United States District Court for the Southern District of Iowa, announced United States Attorney Nicholas A. Klinefeldt. Hingorani’s company, Midwest Paving, Inc. (MPI), was sentenced to two years of probation, after pleading guilty to money laundering in furtherance of the scheme. Midwest Contracting, Inc. (MCI), another company utilized to perpetrate the fraud, was also sentenced to two years of probation, after pleading guilty to major program fraud and wire fraud. In addition, the defendants were ordered to forfeit $3,352,510.55 seized by the government and determined by the court to be profits of the fraud scheme.
On May 22, 2013, a federal grand jury in the Southern District of Iowa issued a 32-count Indictment charging Hingorani, business partner Ronald Waugh, MCI and MPI, in connection with an approximate $23.5 million Service-Disabled Veteran-Owned Small Business (SDVOSB) fraud scheme. The charges included multiple counts of major fraud, wire fraud, money laundering and conspiracy. Subsequent to the indictment, agents seized approximately $3.9 million from 14 separate financial accounts.
Beginning in May of 2007 and continuing through August of 2010, MCI unlawfully received 45 set-aside and/or sole-source SDVOSB contracts from the U.S. Department of Veterans Affairs and U.S. Department of Defense (DoD), to include contracts involving American Recovery and Reinvestment Act (ARRA) funds. The investigation revealed MCI was a pass-through and/or front company for Hingorani’s other businesses and that Waugh, a service disabled veteran, did not own or control MCI.
To the contrary, Hingorani, who is not a veteran, controlled MCI and falsely certified MCI’s SDVOSB status through the General Service Administration’s Central Contractor Registration (CCR) and Online Representations and Certifications Application (ORCA) databases. As a result of falsely certifying MCI’s status as a SDVOSB, MCI received 45 federal contracts that would have otherwise been awarded to legitimate Service-Disabled Veteran Owned Small Business Concerns.
In light of his cooperation, the United States dismissed all charges against Ronald Waugh, the service disabled veteran utilized by Hingorani to perpetrate the fraud scheme. Hingorani, MCI and MPI are currently suspended and face administrative debarment from obtaining future government contracts.
This case was investigated by the General Service Administration-Office of Inspector General, US Department of Veterans Affairs-Office of Inspector General, the Department of Defense-Office of Inspector General, the Small Business Administration-Office of Inspector General, and the Federal Deposit Insurance Corporation-Office of Inspector General. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Source: U.S. Attorney's Office press release
