CLEVELAND -- A 65-count superseding indictment was filed Wednesday against a Brecksville man, charging the former director of the Cleveland and Dayton VA Medical Centers with a scheme to enrich himself and his conspirators by working as a consultant for, and taking money from, a design firm pursuing more than $1 billion in VA contracts.
William D. Montague, 61, wasalso indicted for sharing confidential information about VA construction projects while still employed by the VA, law enforcement officials said.
Montague was previously charged with conspiracy to commit honest services mail fraud, bribery, money laundering, multiple counts of wire fraud, mail fraud, disclosing public contract information and other charges.
The charges unsealed Wednesday include conspiracy to commit honest services fraud, Hobbs Act conspiracy, violating the Hobbs Act and additional counts of mail and wire fraud.
"As a Veterans Affairs Medical Center Director, William Montague misled staff and misused his position to enrich himself and businesses pursuing contracts with the Veterans Administration," said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation's Cleveland Office.
"VA directors who use their official position for personal enrichment will be held to account," said Gavin McClaren, United States Department of Veterans Affairs – Office of Inspector General, Resident Agent in Charge, Cleveland. "Our nation's veterans deserve public officials and contracts who serve veterans' needs and not their own."
Montague served as director of the Cleveland VA Medical Center from 1995 until Feb. 3, 2010. On March 11, 2011, Montague began working as director of the Dayton VA Medical Center, a position he held through Dec. 17, 2011, according to the indictment.
The superseding indictment details interactions between Montague and a company identified as Business 75, an integrated design firm with offices throughout the United States, including New York, Illinois, Virginia, Missouri and California. The company performed work for the VA directly and through its participation in joint ventures and other teaming agreements, according to the indictment.
From January 2010, Montague, Business 75 and employees of the company conspired to defraud the VA of its right to the honest and faithful service of Montague through bribery and kickbacks, and to defraud the VA and other potential VA contractors by means of false and fraudulent pretenses, according to the indictment.
Montague secretly used his position as Dayton VA Medical Center director to enrich himself and his designees (including House of Montague, a company Montague operated) by soliciting and accepting gifts, payments and other things of value from Business 75 in exchange for favorable official actions, according to the indictment.
Montague solicited money and a consulting contract from Business 75 in exchange for information related to VA contracts and projects, which would benefit Business 75, Business 75's principal and their designees, according to the indictment.
This was done to give Business 75 an advantage in obtaining VA contracts and projects. Montague gave false and misleading information to VA employees about his reasons for requesting VA documents and information, according to the indictment.
For example, on March 1, 2011, Business 75 issued a $20,000 check payable to Montague, which he deposited into the House of Montague's account. Ten days later, Business 75's principal sent an email to some employees with Montague's consulting agreement explaining: "His job is to help us bring in more work from the VA, in part by helping us access key decision makers," according to the indictment.
On March 14, 2011, Business 75's principal sent another email to some employees stating that Business 75 will end the current "$15 [million VA] IDIQ contract with just slightly over $12M in sales. $3M in fee, therefore, will be left on the table…[O]ne of MONTAGUE's jobs will be to fill up the bucket by directing task orders toward our contract, Going forward, we have two $15M buckets to fill (Central and Eastern regions)...
...That's a lot of shoveling to get to $30M…BILL has the relationships to help us maximize the contracts…On the VA 'major construction' front here is the list of medical centers and their approximate construction cost in the pipeline: West Los Angeles, CA: $750M; San Francisco, CA: $125M, Reno, NV: $115M, Alameda, CA: $225M. Montague told us about these before they were advertised, which has allowed us to get an early start in developing the team. If we bring him on board, he can help us pull in one or two of these large projects," according to the indictment.
On or about September 12, 2011 at approximately 2:24 p.m., Business 75 Principal sent an email to Business 75 employees in response to a previous email sent by another Business 75 employee on September 6, 2011 at approximately 9:48 p.m., which announced Business 75?s selection as the architect and engineer for the VA West LA VAMC. Business 75 Principal wrote:
Montague further engaged in self-dealing by double-billing the VA and his consulting clients for the same travel expenses. For example, the superseding indictment charges that on May 26, 2011, Montague travelled to Washington DC on official VA business.
On June 17, 2011, he caused to be submitted a government expense report seeking reimbursement for $1,204 for hotels, hotel taxes, parking, per diems and other expenses. On June 12, 2011, Montague caused to be sent a $2,741 invoice to Business 75 for "consulting services" for work performed at "Wash/Cleve/Dayton." The invoice included $211 for hotel and $30.60 for hotel taxes incurred on May 26, 2011, according to the indictment.