A Westside parking lot operator was sentenced Monday to nearly six years behind bars for swindling the U.S. Department of Veterans Affairs out of at least $12 million and bribing a federal official to keep the long-running scheme secret.
Richard Scott, 58, of Santa Monica was given a 70-month federal prison term on the conspiracy and wire fraud counts to which he pleaded guilty in May. As part of his plea agreement, Scott and his wife agreed to forfeit all of their ill-gotten assets, estimated at a value of about $8 million, and he has agreed to pay $12.6 million in restitution, a figure that takes into account some money already repaid to the VA.
“Your honor, I made terrible decisions — decisions I’m ashamed of,” Scott told the court, adding apologies to his family and the VA.
Scott kept two sets of books to hide revenue from parking lots that his company, Westside Services LLC, operated at the VA Medical Center in West Los Angeles. The lots were used for the hospital as well as UCLA baseball games, events at the Wadsworth and Brentwood theaters, and the PGA golf tournament at the Riviera Country Club.
Scott’s contract required him to provide the VA with 60 percent of the gross parking revenues from the lots, and he was required to submit annual reports detailing revenue generated by parking fees, as well as improvements and services his company provided that could be used to offset payments the VA, according to documents filed in Los Angeles federal court.
According to the U.S. Attorney’s Office, the investigation determined that one set of Scott’s books contained false revenue and expense statements, and a second set contained actual revenues and expenditures, aside from unreported cash.
Assistant U.S. Attorney Ruth Pinkel said outside court that the yearlong investigation into Scott’s fraud scheme involved federal agents who each had accounting degrees.
Scott bought a “tremendous amount of assets and lived really high on money that should’ve gone to the VA,” Pinkel said, adding that the scheme was “reprehensible.”
As part of the scheme, Scott began bribing then-VA contracting official Ralph Tillman, who was responsible for overseeing the contract in 2003, paying him a total of about $300,000 in “hush money” until Tillman abruptly retired in 2014 after he was confronted by federal agents.
Tillman, 58, pleaded guilty in February to federal tax charges and lying to investigators when he denied taking bribes from Scott. The Whittier resident faces up to eight years behind bars when he is sentenced Aug. 27 by Klausner in downtown Los Angeles.
As a result of the 15-year scheme to defraud the VA, Scott amassed considerable wealth, including three Santa Monica condominiums with a cumulative estimated value of $7 million; numerous high-end collectible cars, including several classic Corvettes and three Ferraris; a Cigarette Top Gun racing boat; and bank and brokerage accounts containing more than $1 million, according to the U.S. Attorney’s Office.
Defense lawyer Richard Schonfeld said outside court his client is “remorseful and ashamed” and takes full responsibility for his crimes.
“This was a fair result to a difficult circumstance,” he said.
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