Sackets Harbor man sentenced for conspiring to defraud U.S. government
May 17—FORT DRUM — A former contractor was sentenced on Thursday and ordered to pay restitution to the federal government after pleading guilty to conspiracy to commit wire fraud in relation to government contracts and conspiracy to commit an offense against the United States.
A news release from the Department of Justice on Friday said that Sean O'Sullivan, 61, Sackets Harbor, was ordered to pay $345,271 in restitution to the federal government and serve two years of probation.
The news release says the wire fraud conspiracy was related to government contracts O'Sullivan fraudulently got with his former business partner David Rose, Newport News, Virginia, that were supposed to be for Service-Disabled Veteran Owned Small Businesses.
In order to receive the designation, the majority owner of the construction company must be a veteran with a disability rating as a result of military service and the veteran must personally manage and control its daily business.
In his guilty plea, O'Sullivan admitted that he conspired with Rose to defraud the government by bidding and obtaining contracts for SDVOSBs that they were not entitled to, and became co-owner of Sierra Delta Contracting, according to the news release.
The DOJ said O'Sullivan managed Sierra Delta, bid on, and received contracts mostly at Fort Drum, and although Rose is a service-disabled military veteran, O'Sullivan is not.
O'Sullivan falsely told federal agencies that Rose managed and controlled Sierra Delta's day-to-day business operations when it was O'Sullivan who controlled and managed the company.
They obtained multiple contracts from the U.S. Army between May 2014 and July 2017 and one construction contract from the U.S. Department of Transportation that were supposed to be for SDVOSBs, resulting in more than $3.3 million being received in gross revenue from the falsely obtained contract. O'Sullivan admitted that he received $345,271 in profit.
Two government agencies challenged their SDVOSB status and questioned whether Rose actually managed the company on a day-to-day basis. Rose then claimed that he "control[led] the long term and day to day operations of Sierra Delta Contracting, LLC," that he maintained the company's "main office" in Virginia, that he worked on its business 25 hours a week and O'Sullivan dedicated substantially less time to the construction company.
Rose also said he was the person that was responsible for decisions about which projects will be bid on by Sierra Delta and that he was the person who was responsible for proposals and pricing, according to the news release.
Rose, O'Sullivan, and their businesses have previously agreed to pay $758,526.68 to the federal government for a civil liability for the submission of false claims to the U.S. seeking payments on fraudulently obtained contracts with O'Sullivan and Sierra Delta Contracting and SOS, agreeing to pay $690,542,68 and Rose paying $67,984.
Rose pleaded guilty for his role in the conspiracy and received $33,992 in profit. He was fined $2,000.
O'Sullivan's $345,271 restitution payment has been done through the related civil settlement.
O'Sullivan's sentence was related to another guilty plea for conspiring to commit an offense against the United States by offering and giving gratuities to a former civilian contracting officer, Cindy McAleese, on Fort Drum, promising and providing sports tickets, meals, sexual encounters, and time and attention because of the official action McAleese took on O'Sullivan's behalf.
They kept their relationship a secret from other Fort Drum officials and O'Sullivan's colleagues.
The U.S. Attorney's Office for the Northern District of New York; the Department of Defense Office of Inspector General Defense Criminal Investigative Service; General Services Administration; Office of the Inspector General; United States Small Business Administration; Office of Inspector General; and Department of Transportation of Inspector General, Northeast Region all worked on the case.
