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Government Contractor Pays $5 Million to Settle Claim Involving Disabled Veterans

The U.S. Attorney’s Office for the Northern District of New York has announced a settlement in a case involving a government contractor in Syracuse, New York, with the contractor agreeing to pay $5 million plus interest to resolve allegations that company officials conspired to violate federal laws the protect veterans injured on active duty. The company, Hayner Hoyt Corporation, its affiliates Le Moyne Interiors and Doyner, Inc., and a number of its employees, had been the target of an investigation jointly conducted by the U.S. Attorney’s Office and the Office of Inspector General at the Department of Veterans Affairs.

According to investigators, the defendants conceived and implemented a scheme whereby one of the defendants, Ralph Bennett, who was a service-disabled veteran, was named president of a now defunct entity known as 229 Constructors, LLC. Investigators say that Bennett was a mere figurehead, with no involvement in the operation or management of the company. To the contrary, Bennett kept track of the company’s tools and plowed snow for the company, while the day-to-day running of the business was handled primarily by Jeremy and Gary Thurston, president and CEO, respectively, of Hayner Hoyt.

Investigators allege that the Thurstons (neither of whom ever served in the armed forces of the United States) contrived the setup to wrongfully take advantage of Bennett’s status as a disabled veteran. Under federal contracting guidelines, small businesses owned and operated by disabled veterans are part of a targeted procurement program, whereby the disabled vets get some priorities when bidding for contracts. The rules require that the disabled veteran must be an owner of the business, must control and handle day-to-day management, and must make strategic decisions for the business. The investigation showed that the Thurstons filed false statements alleging that Bennett owned and operated the company, and wrongfully obtained business that should have been awarded to disabled vets.

As a part of the settlement agreement, the defendants acknowledged that they had violated federal regulations. According to a government spokesperson, the wrongful activities resulted in a gross profit to Hayner Hoyt and its subsidiaries of nearly $300,000.