2 Arraigned in Kickback Scheme: Two men...
2 Arraigned in Kickback Scheme: Two men who are accused of helping a Laguna Niguel construction consultant carry out the largest-ever kickback scheme against the U.S. Small Business Administration were arraigned this week in U.S. District Court in Los Angeles.
Craig A. Vaz and Howard K. James each posted a $25,000 unsecured bond. A preliminary hearing was set for Oct. 19 by Judge Charles Eick.
The scheme started in 1990, when Southern Specialty Co., a Nevada construction company, failed to complete three of 11 projects for the Navy and Air Force. The government hired Forcon International Inc., an Irvine construction consultant, to search for a new subcontractor. Forcon, in turn, hired John R. Sevier III of Laguna Niguel to conduct the search.
Sevier arranged for Vaz and James’ Temecula company, Paragon Pacific Contractors Inc., to be awarded the contracts on the understanding that it would inflate the bills far in excess of the legitimate cost of $171,805. Sevier used the excess money to pay his personal debts.
Sevier pleaded guilty to three counts of masterminding a scheme to defraud the SBA of $175,600 and three counts of soliciting kickbacks. He is scheduled to be sentenced in November.
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