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Couple Sentenced For Conspiracy, Wire Fraud, And Major Fraud Against The United States

Publication date: 
Friday, March 3, 2023

CHATTANOOGA, Tenn. – Today, Ricky and Katrina Lanier, 55 and 49, both of LaGrange, N.C., were sentenced by the Honorable Travis McDonough, Chief United States District Court Judge for the Eastern District of Tennessee at Chattanooga, to serve federal prison terms of 48 months and 24 months, respectively, for conspiracy to commit wire fraud, wire fraud, and major fraud against the United States.  Following their incarceration, the Laniers will each be on supervised release for a period of one year.  Chief Judge McDonough ordered forfeiture of the couple’s bank accounts and deferred a ruling on a money judgement until a later date.

The couple were found guilty of these offenses, in violation of 18 U.S.C. §§ 1349, 1343, and 1031 on July 29, 2022, following a two-week jury trial in U.S. District Court.  According to evidence presented at trial, the Laniers conspired from 2005 to 2013 to defraud the United States government through a scheme to fraudulently obtain federal contracts intended to be awarded to businesses lawfully participating in the Department of Veterans Affairs’ (VA) Service-Disabled Veteran-Owned Small Business (SDVOSB) program and the Small Business Administration’s (SBA) 8(a) Business Development program.  They falsely represented that JMR Investments and Kylee Construction were eligible for these programs.  Their actions also deprived legitimate service-disabled veteran and minority-owned businesses from obtaining government contracts on which they were eligible to bid.

Ricky Lanier, who had previously owned and operated an 8(a) business receiving government contracts, became ineligible to participate in the 8(a) program after that business graduated from that program in 2008.  Lanier used a long-time friend and service-disabled veteran as the purported owner of Kylee Construction, falsely representing that the friend was involved in the daily management of the business, even while the friend was working for a government contractor in Afghanistan.  The Laniers used a minority-owned business run by Ricky Lanier’s college roommate, JMR Investments, as a front to obtain construction contracts from the National Park Service and other federal agencies under the 8(a) program, misrepresenting the friend’s involvement in the management and operation of the business.  The scheme also involved sub-contracting most of the work on the contracts in violation of program requirements.  As part of the scheme, the Laniers opened and controlled bank accounts into which government money was deposited, and they used those accounts to pay for extravagant vacations; monthly payments on a personal private airplane; a Mercedes Benz; mortgage payments for their personal residence; purchases of additional real estate; and purchases of personal property such as shoes, clothing, food, and souvenirs while on vacation.

The Laniers also defrauded the National Park Service in connection with a contract to replace a wastewater treatment facility at the Tremont Institute in the Great Smoky Mountains National Park, falsely representing subcontractor costs by over $400,000, resulting in the award of a $1.1 million contract for work on the project that was actually performed by a subcontractor for only $550,000.  The Laniers further fraudulently obtained a $1.3 million construction contract at the James H. Quillen VA Medical Center, which had been set aside for service-disabled veteran owned businesses.       

As a result of the false representations, Kylee Construction was awarded over $5 million in government contracts and JMR Investments was awarded over $9 million in government contracts.  The Laniers received almost $3 million in financial benefit from the scheme.

“The defendants’ conduct was especially egregious,” said United States Attorney Francis M. Hamilton III.  “Of course, the dollar value of the government contracts was quite high, and the defendants obtained enormous personal gains to maintain a lavish lifestyle.  More importantly, not only did the defendants steal from the United States, they stole opportunities from scores of honest deserving entities such as legitimate service-disabled veteran-owned businesses who are trying to making a living in the civilian sector after having served the nation honorably.”

“Conspiring to fraudulently obtain millions of dollars in government contracts from programs designed to benefit service-disabled veteran business owners steals opportunities from the deserving and lines the pockets of the greedy.  The VA OIG remains committed to diligently pursuing these cases in an effort to maintain the integrity of VA programs,” said Special Agent in Charge Kim R. Lampkins of the VA Office of Inspector General’s Mid-Atlantic Field Office. “The VA OIG thanks the US Attorney’s Office and our law enforcement partners for their joint efforts to achieve justice in this case.” 

“Illegally obtaining federal contracts steals taxpayer dollars and opportunities from the nation’s small business community,” said SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Brathwaite.  “OIG is committed to rooting out bad actors and protecting the integrity of SBA programs.  I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

Special Agent in Charge Katherine Balestra, U.S. Department of Interior OIG, recognized the efforts of the investigative team in protecting the Service-Disabled Veteran Owned Small Business program. "These investigations are so important to ensure that these federal contracts go to the individuals for whom they are intended," Balestra said.

Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Ricky and Katrina Lanier included the Veterans Administration Office of Inspector General (VA OIG), Department of the Interior Office of Inspector General (DOI OIG), and Small Business Administration’s Office of Inspector General (SBA OIG), with assistance from the U.S. Secret Service.

Assistant U.S. Attorneys Steven S. Neff, Perry H. Piper, and Anne-Marie Svolto represented the United States.


Additional Details
USAO - Tennessee, Eastern;
Department of Veterans Affairs OIG