The owner of a suburban Chicago medical supply company has been sentenced to five years in federal prison for paying kickbacks to a U.S. Department of Veterans Affairs employee in exchange for procuring orders of medical equipment. Darren A. Smith operated a medical distribution company based in Bolingbrook, Ill.  From 2017 to 2020, Smith schemed with a procurement clerk in the Veterans Health Administration Prosthetics Service in Chicago to have the VA order costly medical equipment from Smith’s company in exchange for concealed kickbacks to the clerk.  The orders placed by the clerk involved unnecessary and more expensive rentals of certain medical equipment from Smith’s company instead of purchasing the equipment outright, as VA physicians had instructed.  The VA spent more than $2.7 million at Smith’s company and fraudulently overpaid it by more than $1.3 million.  In exchange, the clerk pocketed kickbacks from Smith of at least $220,000.

A federal jury earlier this year convicted Smith, 60, of Hazel Crest, Ill., on eight counts of wire fraud.  In addition to the prison term, U.S. District Judge Edmond E. Chang on Wednesday fined Smith $10,000 and ordered him to pay more than $1.3 million in restitution. The VA procurement clerk, ANDREW LEE, of Chicago, pleaded guilty to a wire fraud charge prior to trial.  He is awaiting sentencing. Smith’s sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Gregory Billingsley, Special Agent-in-Charge of the Department of Veterans Affairs, Office of Inspector General, Central Field Office.  The government is represented by Assistant U.S. Attorney Heidi Manschreck and Special Assistant U.S. Attorney Benjamin Christenson. “Instead of paying for essential equipment and supplies for veterans, the defendants used the VA’s money to line their own pockets,” said Acting U.S. Attorney Pasqual.  “Our office remains committed to preserving the integrity of the VA health care system.
“This sentence should send a message that corrupt VA employees will be rooted out and prosecuted,” said SAC Billingsley.  “These fraudulent activities erode public trust and divert taxpayer money intended for our nation’s deserving veterans.  The VA OIG thanks the U.S. Attorney’s Office for their efforts in this investigation.”