Ex-security contractor chief sentenced for role in $31M fraud

June 21, 2013 at 5:05 PM
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WASHINGTON, June 21 (UPI) -- A former head of a Virginia contracting firm was sentenced to six years in prison for fraudulently securing federal grants meant for minority-owned businesses.

Keith Hedman, the former chief executive of Protection Strategies Inc., used his expertise to create fronts to get more than $31 million meant for disadvantaged small businesses, and bribed the former regional director for the National Capital Region of the Federal Protective Service as part of the scheme, the Justice Department said Friday in a release.

The front companies got the contracts through an SBA program that allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.

Hedman, 53, of Arlington, Va., pleaded guilty to major government fraud and conspiracy to commit bribery in March.

Hedman was also ordered to forfeit about $6.1 million.

"Keith Hedman tried to game the system and take advantage of a government program designed to help minority-owned small businesses," said U.S. Attorney Neil H. MacBride. "He committed fraud; he undermined the trust of the U.S. government."

Justice officials said the scheme netted government contracts valued at more than $153 million and various conspirators garnered more than $6.1 million that they were not entitled to receive from payments.

Seven other defendants have pleaded guilty in the scheme.

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