HARRISBURG, Pa. — Update, Dec. 16, 2022: The United States Attorney’s Office for the Middle District of Pennsylvania revealed that they have charged Scott E. Boone, age 51, of Enola; Daniel E. McGuire, age 60, of Landisville; Thomas E. Lauer, age 60, of Butler and Rebecca J. Davis, age 73, of Bethel Park as the co-conspirators in this scheme.
The office alleges that Davis was the president of a company called Elstner Construction Company and her company was admitted to the SBA’s 8(a) Program in 2001.
It is alleged that Davis' role was limited to signing checks for vendors, suppliers and subcontractors, despite the condition that her company must perform at least 15% of the contract work with its own employees in order to meet the the SBA’s 8(a) Program requirements.
The indictment contains forfeiture allegations against Boone, McGuire, Lauer and Davis in the amount of $85 million—the same amount the defendants allegedly fraudulently obtained in construction projects at Letterkenny Army Depot.
Boone, McGuire and Lauer are also accused of fraudulently obtaining a contract at the VA Medical Center in Salem, Virginia, through Boone's qualification for a different small business development program focused on service-disabled veteran owned small businesses (SDVOSBs). This contract was worth $5.3 million.
Update, Dec. 9, 2022: James Coccagna pleaded guilty to one count of criminal conspiracy at a hearing in U.S. Middle District Court on Thursday, Dec. 8.
He faces a maximum penalty of five years in prison, followed by a period of supervised release, and a fine.
He will be sentenced at a future hearing.
Previously
A Chambersburg man has been charged in a conspiracy to defraud government programs for disadvantaged small business owners.
According to the United States Attorney's Office for the Middle District of Pennsylvania, James A. Coccagna, 67, was charged with one count of conspiracy to commit violations of the Major Fraud Act.
According to the Department of Justice, between 2003 and 2014, Coccagna, the then chief of the engineering and planning division in the Directorate of Public Works at Letterkenny Army Depot in Chambersburg, worked with a number of unnamed coconspirators to manipulate the U.S. Small Business Administration's 8(a) Business Development program.
Coccagna allegedly steered federal government contracts to certain participants in the 8(a) program, knowing that those companies and their existing employees, if any, were not playing any meaningful role in performing contracts awarded to them.
The program requires socially and economically disadvantaged individuals to exercise unconditional control over their own companies. It also requires these companies to commit to performing at least 15% of the cost of any contract with their own employees.
When companies meet these criteria, they can enter the 8(a) program for a period of up to nine years and then bid on contracts reserved for companies in the 8(a) program. These reserved contracting opportunities are often referred to as "set-aside" contracts.
According to documents, Coccagna allegedly conspired with three individuals in the construction field for over a decade to get set-aside contracts at Letterkenny awarded to a series of 8(a) program participants controlled by the three unnamed individuals.
These 8(a) program participants included a company known as 8(a) company 1, which was affiliated with another unnamed individual known as coconspirator 4.
Starting around 2007, it is alleged that Coccagna and coconspirators 1, 2, 3, and 4 began conspiring to obtain 8(a) program set-aside construction contracts at Letterkenny Army Depot, a facility under the command structure of the U.S. Army Aviation and Missle Command.
Coccagna allegedly recommended that the Letterkenny contracting office select 8(a) company 1 for a series of contracts because he knew of the company's affiliation with coconspirators 1, 2 and 3.
It is also alleged that Coccagna made similar recommendations for several other 8(a) program participants, likewise on the basis of their affiliation with coconspirators 1, 2, and 3.
In order to make it appear that company 1 was meeting the 15% self-performance requirement, coconspirators 1, 2, 3 and 4 allegedly moved actual laborers who were on-site at Letterkenny Army Deport onto company 1's payroll.
The same practice was allegedly carried out with the other unnamed 8(a) program participants dating back to 2003.
It is alleged that Coccagna was aware of this practice and was also aware that coconspirator 4's employees were not performing on-site work. It is also alleged that coconspirator 4 was rarely, if ever, present at Letterkenny Army Depot following an initial meeting with Coccagna and others in 2007.
Documents additionally allege that coconspirator 1 solicited and Coccagna provided confidential information to coconspirator 1 in order to help the other coconspirators win a $60 million construction contract in 2009.
The total value of the contracts associated with this alleged conspiracy exceeds $100 million.
The maximum penalty under federal law for conspiracy is 5 years of imprisonment, a term of supervised release following imprisonment, and a fine.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
