Authorities claim the suspect owes the Department of Veteran’s more than $11 million

Kate Cagle

Daily Press Staff Writer

A Santa Monica man is accused of defrauding the U.S. Department of Veteran’s Affairs (VA) out of $11.4 million over the last ten years and bribing at least one federal official to keep the scheme going.

Early Wednesday federal agents began seizing Richard Scott’s assets, including a racing boat in Miami, a 1969 Corvette L88, two high-end Mercedez-Benzes and a Shelby Super Snake Mustang, according to the US Attorney’s office.

Scott, who owns three million-dollar condos in Santa Monica, operated parking lots throughout the VA Greater Los Angeles Healthcare System.

He’s accused of failing to report $4.7 million in revenue and adding $8.2 million to his expense reports to the Federal Government. His company, Westside Services LLC (WSS), had a contract to share 60 percent of his gross revenues with the VA.

The contract required Scott to submit revenue generated by parking fees, as well as improvements and services that could offset the profits. Investigators allege Scott kept two sets of financial books – one containing false revenue and expense statements, the other contained the actual numbers except for unreported cash.

Scott allegedly started bribing a VA contracting official responsible for overseeing his account in 2003, according to a 103-page affidavit filed in the case.

Federal agent confronted the official in 2014 and he abruptly retired. However, Scott continued making payments in order to avoid losing his contract, according to investigators.

The official began cooperating with the federal investigation in May, admitting he participated in the scheme and revealing that Scott used proceeds from cash parking events to pay the bribes.

“He was definitely bribing me and I was definitely looking the other way,” said the official according to the affidavit.

Further, the affidavit alleges Scott used his WSS bank account to pay for his own $3.1 million salary, as well as $740,000 in travel and $413,000 worth of meals.

“The travel and meal/entertainment expenses are especially suspicious because the business of WSS consisted of overseeing parking lots at the VA GLAHS, only two of which were regularly staffed, which did not require any travel beyond the few mile area” around the VA’s West Los Angeles campus,” reads the affidavit in part.

A major fraud conviction could send Scott to federal prison for a decade.

The VA terminated the contract with WSS earlier this year after setting a lawsuit that challenged the VA’s use of its West Los Angeles Medical Campus for purposes not specifically related to the care and housing of veterans. WSS will continue to operate the parking lots until January.

The U.S. Department of Veterans Affairs, the Federal Bureau of Investigations, Office of Inspector General and the IRS worked together on the case.

kate@www.smdp.com