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 LA parking lot operator, Richard Scott, accused of defrauding Veterans Affairs out of $11M! Feds seize assets in early morning raid

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Los Angeles parking lot operator allegedly defrauding Veterans Affairs out of $11M
Richard Scott, owner of Westside Services, was arrested Wednesday at his home in Santa Monica home 
Scott, 58, is contracted to operate parking lots on the campuses of the VA in Los Angeles
He is alleged to have failed to properly report income and expenses
 Scott allegedly maintained at least two sets of financial books, one contained false revenue and expense statements, and an actual revenues and expenditures
Contractor under-reported revenue of $4.7M, over-reported expenses$8.2M
Scott’s seized assets, including a racing boat, three Ferraris, a 1969 Corvette L88, two “high-end” Mercedes-Benz vehicles, and a Shelby Super Snake Mustang

Richard Scott arrest 1

Some of the ‘assets’ authorities seized after feds arrested Richard Scott, Wednesday in Santa Monica, Calif

A Los Angeles based businessman was arrested Wednesday on charges of bilking the U.S. Department of Veteran’s Affairs out of more than $11 million.
Prosecutors say Richard Scott, the owner of Westside Services LLC, was arrested without incident Wednesday morning, at his home in Santa Monica, California
According to a criminal complaint filed earlier this month,shortly after 58-year-old Scott obtained a contract to operate parking lots on the campuses of the VA Greater Los Angeles Healthcare System, he began defrauding the VA by failing to properly report income and expenses.
The vast majority of the activity authorized under the contract took place at the West Los Angeles VA Medical Center near Westwood, prosecutors said.
The affidavit says for more than a decade, Scott has had a contract with the VA requiring him to provide the agency with 60 percent of the gross revenues from the parking lots.

Feds seized high end vehicles during Thursday's arrest of Richard Scott who is suspected of defrauding VeteransAffairs of $11 Million 3Fruit of the poisoned tree: Black Ferrari was just one of several high end vehicles Feds seized during Thursday’s arrest of Richard Scott 
Feds seized high end vehicles during Thursday's arrest of Richard Scott who is suspected of defrauding VeteransAffairs of $11 Million 2.jpgFerrari No. 2 seized by Feds seized high end vehicles during Thursday’s arrest of Richard Scott who defrauded VA of millions

But prosecutors say investigators determined that Scott maintained at least two sets of financial books: one which contained false revenue and expense statements, and a second set of books maintained by Scott’s tax preparer containing the actual revenues and expenditures, except for unreported cash.
Scott ai accused of under-reported revenue to the  by a minimum of $4,689,081 and over-reported expenses to the VA by a minimum of $8,219,762, which caused a direct loss to the VA of $11,397,779.

Feds seized high end vehicles during Thursday's arrest of Richard Scott who is suspected of defrauding VeteransAffairs of $11 Million 1.jpgFerrari No 3  seized by Feds during Thursday’s arrest of Richard Scott in Santa Monica, Calif

As part of the scheme to defraud the VA, Scott allegedly began bribing the VA contracting  contract administrator, Ralph Tillman, $130,530 to overlook the fraud, FBI special agent Michael Torbic alleged in an affidavit.
Tillman was charge of the contract in 2003. Scott continued to bribe him on a regular basis until he retired abruptly in 2014 after he was confronted by federal agents,  according to the affidavit.
Tillman eventually admitted he continued to take what he called ”hush money” after his retirement; “He was definitely bribing me and I was definitely looking the other way,” the official said in the affidavit.
Tillman has not been charged; the investigation is ongoing.

Richard Scott paid himself $3.1 million a year and ran up exorbitant travel and entertainment expenses, though all his business took place in the same area of Los Angeles. He amassed three Santa Monica condominiums valued at $2.3 million each, a house in Malibu and brokerage accounts, Torbic alleged.
In a parallel move, federal agents moved to seize his assets, including a racing boat, three Ferraris, a 1969 Corvette L88, two “high-end” Mercedes-Benz vehicles, and a Shelby Super Snake Mustang.

 

 

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