Two now former federal employees from the Department of Veterans Affairs pleaded guilty recently to an elaborate embezzlement scheme totaling nearly $3 million.
According to the Justice Department, Randius McGlown, 56, and Charles Gates, 54, both pleaded guilty to theft of government funds.
According to the plea papers, McGlown was an inventory manager and acquisition utilization specialist at the Dallas VA Medical Center. He created a company called G4 Logistics and entered it into the VA’s vendor system in 2014.
He and Gates then generated fake purchase orders for G4 equipment and materials which were then paid for using a purchase card issued by the VA medical center through Stripe, an online payment processing system. G4 Logistics never delivered any of the items.
Money paid to G4 was deposited into an account controlled by an individual identified in court documents as J.R. When he was notified of a fake purchase, J.R. would withdraw the money from the account, deliver most of it to McGlown or Gates, and keep the remaining amount for himself.
In 2018, McGlown began using another fake company he established called Caprice in lieu of G4. He created fake invoices and used existing items in the VA medical center’s inventory to conceal the fact that neither of the two companies ever delivered any materials.
Both McGlown and Gates face up to 10 years in federal prison as a result of the scheme.
“Using their official government positions to steal millions of taxpayer dollars is an egregious crime that diverts resources from deserving veterans and erodes public trust. These guilty pleas should send a clear message that the VA Office of Inspector General will diligently investigate those who would misuse their positions to commit fraud,” said Acting Special Agent in Charge Patrick Roche of the VA Office of Inspector General’s South Central Field Office. “The VA OIG thanks the US Attorney’s Office and our law enforcement partners for their efforts in this joint investigation.”