A former U.S. Department of Veterans Affairs contracts administrator was sentenced Monday to five months in federal prison — followed by five months of home detention and a year of supervised release — for tax fraud and lying to investigators when he denied taking bribes from a crooked parking lot operator at the VA’s Westside medical center campus.
Ralph Tillman, 58, was also ordered to pay $62,000 in restitution to the Internal Revenue Service. After the sentence was pronounced, Tillman was immediately taken into custody.
“There’s no excuse for what I did,” Tillman told the court, apologizing to his family “and especially to the employees” of the VA.
“I am a veteran,” Tillman continued. “I look in the mirror and I’m ashamed for what I did.”
Although Tillman faced a sentencing guideline range of 15 to 21 months behind bars, the government asked for a downward departure based on the defendant’s cooperation in helping prosecutors analyze the fraud and cover-up. The Whittier man met with government agents for more than 80 hours, helping to unravel the complex scheme, prosecutors said.
Early last month, Tillman complied with a request to speak to VA employees and again to investigators at the VA Office of Inspector General to educate them about “how to detect red flags” when fraud is suspected, Assistant U.S. Attorney Ruth Pinkel said.
Tillman, who resigned in 2014 after being confronted by VA investigators, admitted that he took nearly $290,000 in “hush money” from Richard Scott, owner of Westside Services, which had a contract to operate public parking locations across the VA Greater Los Angeles Healthcare System.
Scott, 58, of Santa Monica was sentenced last month to nearly six years in prison for swindling the VA out of at least $12 million generated by his parking lots and bribing Tillman to keep the long-running scheme secret.
U.S. District Judge R. Gary Klausner told Tillman that his apology to the VA and its employees “was significant.”
As part of his job, Tillman was responsible for managing contracts with “sharing partners,” such as Scott’s Westside Services, which were required to share revenues with the agency. He admitted that he first solicited a bribe from Scott in late 2003. About 18 months later, Scott began making monthly cash payments to Tillman, with Scott personally delivering the bribes in sealed FedEx envelopes.
In return for the cash, Tillman failed to scrutinize annual statements from Scott that he knew contained inaccurately reported revenues and expenses. Tillman also admitted that he knew Scott was defrauding the VA out of millions of dollars and that he entered into a contract extension with the parking lot operator in 2011 to continue the fraud and bribery scheme.
Prosecutors said that during an interview with special agents from the VA’s Office of Inspector General in September 2014, Tillman lied when he denied accepting money or anything of value from Scott. In his plea agreement, Tillman admitted taking $286,250 from Scott from 2003 through last year, even after his retirement.
The defendants’ crimes have caused “profound and lasting damage” to the VA, said Meghan Flanz, executive director in charge of the master plan to revitalize the 388-acre medical center campus.
In a letter submitted to the court on behalf of the healthcare system’s executive team in Los Angeles, she expressed “continuing anger, frustration and disgust regarding the actions of the defendants.”
Flanz wrote that while years have passed since Tillman and Scott first conspired to defraud the government, “their corruption continues to harm our campus, our employees, our reputation in the community, and most importantly, the veterans we are honored to serve.”
The VA contract with Scott was terminated in early 2017 after the agency settled a lawsuit that challenged the VA’s use of its Westside campus for any purposes not specifically related to the care and housing of veterans.
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