When the United States ran out of toilet paper and life-saving personal protective equipment during the height of the coronavirus pandemic, federal prosecutors said a 35-year-old contractor in Virginia promised to deliver.
Robert S. Stewart Jr., who now lives in Alabama, was sentenced Wednesday to one year and nine months in federal prison after pleading guilty to defrauding several government agencies last year, the U.S. Attorney’s Office said for the Eastern District of Virginia in a press release Wednesday.
Stewart is accused of securing nearly $ 39 million in government contracts for N95 masks he was unable to deliver, of rigging requests for COVID-19 emergency relief loans and of having lied about his military service to get additional benefits.
His defense attorney, Robert Lee Jenkins Jr. of law firm Bynum & Jenkins PLLC, told McClatchy News on Wednesday that Stewart knew what he had done wrong.
“We are certainly thankful that the period of incarceration was not longer,” Jenkins said. “At the same time, we are disappointed that the judge chose to sentence him to 21 months. In our view, the recommended range of sentences did not take into account some of the mitigating factors that we felt really deserved greater consideration by the judge.
Jenkins had requested a period of home confinement for his client, claiming that Stewart had already refunded the money he was accused of fraudulently obtained and had just completed his first year of law school while fathering a young son.
However, the government had requested a two-year prison sentence, calling its crimes “offensive and insulting”.
Orders for millions of masks have not been fulfilled
Stewart waived his right to an indictment and pleaded guilty to the charges against him in early February, court documents show.
Prosecutors described the alleged fraud in three parts, starting with $ 38.5 million in government contracts that Stewart made with the Department of Veterans Affairs and the Federal Emergency Management Agency for the N95 masks he has said to have readily available.
In emails with government officials, he is accused of falsely stating that he had the masks “on hand” in warehouses in Virginia and Pennsylvania.
Stewart was subsequently awarded a $ 35 million contract with the VA for six million N95 masks and a $ 3.5 million contract with FEMA for 500,000 masks, according to court documents.
Prosecutors said he asked for extensions to deliver the masks before the agencies finally canceled the contracts. The government suffered no losses as Stewart would only be paid after the masks were delivered.
In federal court documents filed nearly a year later, prosecutors said Stewart knew “he had little or no realistic prospect of providing life-saving PPE.”
But Stewart’s attorney said he “didn’t start with the intent to defraud anyone.”
“He honestly believed that despite the fact that the contract required him to have the PPE equipment on hand, he was so confident that he could have access to the equipment that he distorted by already having them,” he said. Jenkins told McClatchy News.
“He got over his head and he understands that there is a price to be paid for the evil he has done.”
Using one fraud to help pay for another
Around the same time that Stewart made the contracts with the government, prosecutors said he requested funds under the Paycheck Protection Program and the Economic Disaster Loan Program.
PPP loans were implemented under the Coronavirus Aid, Relief, and Economic Security Act which passed in March 2020 and were designed to help small businesses keep workers on the payroll amid widespread closures . The CARES Act also extended eligibility for the pre-existing EIDL program to businesses facing difficulties during the pandemic.
Stewart is accused of lying about his two requests for relief funding by overestimating the number of employees who worked for him and how much he paid them.
In doing so, prosecutors said he received $ 805,000 in PPP loans and $ 261,000 from the EIDL program for a total of over $ 1 million in COVID-19 relief.
The government said Stewart used some of the money for his personal expenses – including renting a private jet to try and find N95 masks, ProPublica reported. A media reporter accompanied Stewart aboard the jet on a 36-hour trip last year in which he attempted to fulfill his end of the government deal.
A deceptive past
During the investigation, prosecutors also uncovered discrepancies in Stewart’s military history.
Stewart is an Air Force veteran. But for seven years from 2013, prosecutors said he also presented himself as a former Marine. In order to gain benefits, he said he was a corporal who received many medals and accolades, including the rifle expert badge and the Kuwait Liberation Medal, the government said.
As a result, he received a total of $ 73,722 in VA medical benefits, according to court documents.
“The undeniable fact is that Mr. Stewart has made false statements on certain matters which I understand are very sensitive for many people,” his lawyer said Wednesday. He did not serve in the Marines.
Stewart paid a total of $ 348,714.50 in restitution before being sentenced, covering both COVID-19 relief loans and fraudulent VA benefits.
Accepting a plea deal, his attorney said Stewart hoped he would be allowed to continue attending law school and looking after his son.
“Mr. Stewart didn’t come to court hoping he wouldn’t be punished, he didn’t come to court hoping to avoid a period of incarceration,” Jenkins said. “He only asked the court to shape a punishment for not disturbing these things In our opinion, that is not what the court did.
Under his plea agreement, Stewart cannot appeal the judge’s sentencing decision. But he asked to be placed in a federal facility near Alabama, where he moved before being charged.