WASHINGTON—A Virginia contractor was sentenced today to serve 37 months in prison for participating in a scheme to steer contracts to him for repair, maintenance, and renovation work at health care and nursing home facilities owned by Medical Facilities of America Inc. (MFA), the Department of Justice announced.
Edward T. Fodrey, a resident of Norfolk, Va., was sentenced in U.S. District Court in Norfolk by Judge Mark S. Davis and was ordered to pay $326,799 in restitution. Fodrey pleaded guilty on April 4, 2011, to one count of conspiracy to commit mail fraud in connection with his participation in a kickback scheme and one count of failing to file a tax return.
According to the charge filed on March 30, 2011, from about May 2006 until at least December 2006, Fodrey conspired with an MFA employee who oversaw the bidding process for repair, maintenance and renovation contracts at MFA facilities in North Carolina and Virginia. The MFA employee steered contracts to Fodrey in return for kickbacks by creating fictitious competitor bids that were higher than the quotes submitted by Fodrey and other co-conspirator venders in order to create the appearance of competition. The MFA employee directed subordinates to solicit quotes only from Fodrey or other conspiring vendors and specified the amount Fodrey should quote to MFA as well as the amount of the kickback on each of the contracts.
Fodrey paid more than $160,000 in kickbacks to the MFA employee and received contracts and subcontracts totaling more than $750,000. The court document states that as a result of the kickback scheme, MFA was deprived of competitive pricing to its financial detriment. Fodrey was also charged with failing to file a tax return for 2006, which is the year in which Fodrey received payment on the MFA contracts.
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