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News | Jan. 26, 2022

Auditors Assist in Case Resulting in Business Owner Sentencing for Fraud Scheme

By DCAA Staff Writer

DCAA former auditor Colin Feeney and supervisory auditor Joe Fleming assisted in a fraud case which resulted in 28 months of jail time and a $5.5 million fine for the owner of a construction company who is neither a veteran nor a minority who defrauded the government out of $346 million in contracts meant for service-disabled veterans and minorities.

On June 3, 2019, McPherson pleaded guilty to one count of conspiracy to commit wire fraud and major program fraud. McPherson admitted that he participated in a conspiracy from September 2009 to March 2018 to obtain contracts set aside by the federal government for award to small businesses owned and controlled by veterans, service-disabled veterans, and certified minorities. McPherson, who is neither a certified minority nor a veteran, was the owner of an established construction company in Topeka, Kansas, that was not entitled to compete for those federal contracts.

Zieson Construction Co., was formed in July 2009 with an African-American service-disabled veteran, Stephon Ziegler, as the nominal owner. However, it was actually McPherson and two co-conspirators who ran Zieson Construction. Under their control from 2009 to 2018, Zieson Construction was awarded about 199 federal contracts set aside for small minority- or veteran-owned businesses that the company’s actual owners weren’t entitled to win. The government paid the company about $335 million, and the conspirators used false invoices to take about $4.2 million each from Zieson.

By 2014, Zieson was growing too big to compete for the small business contracts, so the conspirators used a Native American employee, Rustin Simon, to set up another business, Simcon Corp., in Missouri. They used Simcon to compete for more contracts they weren’t actually qualified for, and the company won a $4.4-million Air Force contract and $6.9-million Army contract in 2016.

Several co-conspirators also plead guilty to charges and are awaiting sentencing.

Read the complete Department of Justice press release here.