A Kansas man, who is neither a veteran nor a minority, is going to prison with no chance of parole after his company fraudulently obtained more than $340 million in government contracts intended for companies owned by service-disabled and minority veterans.
Matthew McPherson, 45, of Olathe, Kansas, was sentenced Jan. 7 to 28 months behind bars, with no chance for parole. He was also ordered to pay back the government more than $5 million in proceeds he made from the scheme, according to the Department of Justice.
“This contractor not only defrauded the government but cheated to get contracts that should have gone to firms led by disabled veterans and minority owners,” U.S. Attorney Teresa Moore said in a release. “His greed and deception allowed him to enrich himself at the expense of disabled veterans and minority owners. After forfeiting more than $5.5 million to the government and being sent to prison, he has learned the hard way that crime doesn’t pay.”
Two additional conspirators have also pleaded guilty for their participation and await sentencing later this year. Co-defendant Patrick Michael Dingle, 50, of Parkville, Mo., pleaded guilty on Sept. 13, 2020, to one count of conspiracy to commit wire and major program fraud. Dingle also pleaded guilty, in a separate case, to one count of filing a false tax return. Additionally, Stephon Zeigler, 61, of Weatherby Lake, Mo, pleaded guilty in 2019 to making a false statement to the Department of Veterans Affairs and awaits sentencing.
According to the Department of Justice, McPherson’s scheme began in 2009 when he and his co-conspirators established the Zieson Construction Company with Zeigler, an African-American service-disabled veteran, as the “nominal owner.” However, according to DOJ, Zeigler never actually ran the company day-to-day, nor did he have control of Zieson’s long-term decisions.
“The government established unique programs designed to help small disadvantaged businesses gain a foothold in the awarding of government contracts,” IRS-CI Special Agent in Charge Tyler Hatcher said. “McPherson lied about being qualified for these contracts and used nominees to further his crime.”
In 2014, McPherson and his co-conspirators used the minority status of another Zieson employee — a Native American named Rustin Simon, 45, of Smithville, Mo. — to set up an additional small business through which to expand their ability to earn special government contracts.
McPherson established the Simcon Corporation as a small business in Missouri to obtain federal construction contracts designated for minority business owners. In reality, McPherson and his co-conspirators managed and controlled Simcon throughout, according to DOJ. Not only did Zieson and Simcon use the same employees, same office space, and equipment, but the companies were located in a building owned by an LLC that McPherson controlled.
Zieson purported to subcontract work to Simcon to establish alleged past performance and profitability, thereby enhancing their ability to earn more government work. However, investigators discovered that this work was never actually performed, while McPherson pocketed nearly $320,000 from Simcon using false and fraudulent invoices.
“Today’s sentencing sends a clear message that contractors unjustly enriching themselves at the expense of our nation’s veterans will not be tolerated,” said Acting Special Agent in Charge Gavin McClaren with the VA Office of Inspector General’s Central Field Office.
James R. Webb is a rapid response reporter for Military Times. He served as a US Marine infantryman in Iraq. Additionally, he has worked as a Legislative Assistant in the US Senate and as an embedded photographer in Afghanistan.