A Hazel Crest man was sentenced to five years in federal prison for his conviction of paying kickbacks to a U.S. Department of Veterans Affairs employee in exchange for procuring orders of medical equipment, according to the U.S. attorney’s office.
Darren Smith, 60, operated a medical distribution company in Bolingbrook and, from 2017 to 2020, schemed with a procurement clerk in the Veterans Health Administration to place orders with Smith’s company for medical equipment, according to the U.S. attorney.
The orders placed by the clerk involved unnecessary and more expensive rentals of certain medical equipment from Smith’s company instead of purchasing the equipment outright, as VA physicians had instructed, prosecutors said.
The VA overpaid for medical equipment supplied by Smith by more than $1.3 million, according to prosecutors.
Smith paid kickbacks of at least $220,000 were made to the purchasing agent, who worked at the VA’s Jesse Brown Medical Center in Chicago, according to prosecutors.
U.S. District Judge Edmond E. Chang fined Smith $10,000 Wednesday, and ordered him to pay more than $1.3 million in restitution.
Smith was indicted in November 2021 on eight counts of wire fraud, and a federal jury on April 29 of this year convicted him on all eight counts, according to court filings.
The VA procurement clerk, Andrew Lee, of Chicago, pleaded guilty to a wire fraud charge and is awaiting sentencing.
Prosecutors recommended Chang sentence Smith to a term of between 5¼ to 6½ years in prison, according to their sentencing memorandum filed Oct. 7.
They said that Smith’s “offense involved the brazen and callous exploitation of the VA,” made worse by the fact that Smith was a U.S. Air Force veteran.
Prosecutors said Smith “used the VA as his cash cow,” repeatedly billing it for equipment based on bogus monthly rentals.
Smith’s attorney, Phillip Turner, told the judge in his sentencing recommendation that Smith “has been a law-abiding citizen who comes from humble circumstances and served his country.” He asked Chang to limit Smith’s sentence to a year and a day in prison.
Court filings said Smith has a real estate business and is in the process of selling assets to meet the restitution requirement.
He is required to report for his prison stay by Jan. 20.
