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Defendants in federal Rent-A-Vet program receive probation


Defendants in federal Rent-A-Vet program receive probation

The judge’s words to the defendants were harsh.

Their crimes were serious, said U.S. District Judge William S. Stickman IV.

This was not a brief moment of carelessness, but a criminal enterprise spanning decades.

The defendants misused the identity of a disabled American veteran to obtain government contracts, which the judge said amounted to “stolen valor.”

Despite his harsh words – and the recommended sentencing guidelines, which called for a prison sentence of 12 to 18 months – Stickman ordered that Edward Kessler and Edward DiGorio Jr., both formerly of South Park, serve a one-year suspended sentence, including 100 hours of community service.

In addition, they must each pay a fine of $50,000 and over $400,000 in restitution to the U.S. Department of Veterans Affairs.

Kessler, 69, and DiGorio, 66, both of Myrtle Beach, pleaded guilty in March to two counts of aggravated fraud against the United States.

The men have been running a “Rent-A-Vet” program since 2007.

According to federal prosecutors, Kessler and DiGorio owned ADDVETCO, a construction company incorporated in Pennsylvania in 2007, and Hi-Def Contracting Inc., which was founded in 2009.

With the Veterans Entrepreneurship and Small Business Development Act of 1999, the federal government set a goal of awarding three percent of the total value of all contracts to small businesses owned by disabled veterans.

To be eligible, the disabled veteran had to own at least 51% of the company, be the highest-paid employee, receive 51% of annual profits, and manage day-to-day operations.

Although neither Kessler nor DiGorio ever served in the military, they paid a disabled veteran to pose as the majority owner of their companies.

According to investigators, the two defendants paid the war-disabled veteran money as part of the 11-year-long fraud, but then demanded that he pass on part of the amount in cash to the defendants and their relatives.

While the government acknowledged that the contracts were fully performed, it stated that the defendants were entitled to hundreds of thousands of dollars in profits.

During two separate sentencing hearings on Tuesday, lawyers for the defendants told the court that their clients had led good lives with strong support from their family and friends.

Kessler submitted 30 letters to the court describing him as a good, friendly and fun-loving citizen, while DiGorio submitted 50 letters describing him as kind, patient and generous.

Defense attorneys argued that their clients were entitled to a reduction in the recommended prison sentence based not only on the good work they had done in their community, but also on their age, medical history and the fact that neither of them had a criminal record.

“I am willing to accept whatever consequences you deem necessary to atone for my actions,” Kessler said. “I have tried my best to live an honest life. Despite all the blessings, I have strayed from the course.”

Kessler said he regretted his actions.

“The shame and sadness I felt in this matter will always stay with me.”

DiGorio told the court he was deeply sorry.

“I have worked all my life to be a good role model for my family,” he said. “I want to try to make things right as best as I can. That’s why I have cooperated with the prosecutor’s office.”

But Assistant U.S. Attorney Carolyn Bloch said neither man helped investigators in the case.

“Neither defendant has cooperated with the government,” she said. “They both agreed to plead guilty because they believed it was in their best interest.”

Bloch told the court that she did not believe the men deserved a reduced sentence just because they had good friends and were lucky to have a loving family.

“This was not an isolated incident. This was not a one-off mistake. This was not a bad decision once, twice or three times,” said Bloch. “It was a bad decision 35 times.”

Kessler and DiGorio signed 35 contracts with the government and then tried to cover up the fraud, she said.

“It’s hard to call 11 years of his behavior a ‘miscarriage of justice,'” Bloch said.

Although the prosecutor acknowledged that both defendants would have to pay a fine and substantial compensation, she pointed out that they were able to do so because of the lucrative contracts they obtained through the fraud.

But Stickman was not convinced by Bloch’s argument.

Instead, he said that a prison sentence would not be in the interest of justice in this case.

“You and your co-defendant lied to our government in order to benefit from a program for disabled veterans,” Stickman said. “You did it by lying over and over again.”

The judge said he would not give the men a free pass.

“Probation is a punishment. A fine is a punishment,” Stickman said. “I think it has a deterrent effect.”

Paula Reed Ward is a reporter for TribLive covering federal courts and the Allegheny County courts. She joined the Trib in 2019 after spending nearly 17 years at the Pittsburgh Post-Gazette, where she was part of a Pulitzer Prize-winning team. She is the author of “Death by Cyanide.” She can be reached at [email protected].

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