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NEWARK, N.J. – The Justice Department today sued a Monmouth County, New Jersey, company for allegedly defrauding the United States by falsely claiming to be eligible for more than $16.5 million in government contracts set aside for service-disabled, veteran-owned small businesses, U.S. Attorney Craig Carpenito announced.

VE Source LLC, based in Shrewsbury, New Jersey, and its owners, Sherman Barton and Chris Neary, along with a related company, Vertical Source Inc., allegedly defrauded the government by falsely claiming that VE Source was eligible for government contracts set aside for companies owned and controlled by service-disabled veterans.

To promote contracting opportunities for United States veterans, Congress has authorized federal agencies to make contracts available exclusively to service-disabled, veteran-owned small businesses, known as “SDVOSBs.” Small businesses must be both majority-owned by and controlled on a long-term and day-to-day basis by service-disabled veterans.

According to the complaint:

VE Source 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 DLA contract, VE Source was paid to deliver fire-retardant coveralls for the U.S. Navy; under the USDA contract, VE Source was paid to deliver aprons and apron strings to the USDA. Both contracts were set-aside for SDVOSBs. VE Source’s owners falsely 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 SDVOSBs.

U.S. Attorney Carpenito credited special agents of the General Services Administration, Office of Inspector General, acting under the direction of Inspector General Carol F. Ochoa; The U.S. Department of Agriculture, Office of Inspector General, under the direction of Inspector General Phyllis K. Fong; and the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the investigation leading to the filing of this civil fraud complaint.

The government is represented by Assistant U.S. Attorneys David V. Simunovich and Mark C. Orlowski of the U.S. Attorney’s Government Fraud Unit in Newark.

MIL Security OSI