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Ex-Dayton VA director hit with more federal corruption charges

The former director of the Dayton and Cleveland Veterans Affairs Medical Centers is facing corruption charges for the second time this year, the newest allegations detailed in a 65-count indictment filed this week in Cleveland’s district court.

William D. Montague, 61, of Brecksville, is accused in court documents of a scheme to enrich himself and his conspirators by working as a consultant for — and taking money from — a design firm pursuing $1 billion in VA contracts. He’s also accused of sharing confidential information about VA projects while still employed by the agency.

The charges against Montague — who was named the federal government’s employee of the year in 2000 — include conspiracy to commit honest services fraud, Hobbs Act conspiracy, violating the Hobbs Act, and other counts of mail and wire fraud.

“As a Veterans Affairs Medical Center Director, William Montague misled staff and misused his position to enrich himself and businesses pursuing contracts with the Veterans Administration,” Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office, said in a written statement. “The new charges against Montague reflect law enforcement’s continued dedication to root out corruption at any level.”

Ralph Cascarilla, listed in federal court records as Montague’s attorney, did not return a message seeking comment.

In June, Montague was charged with conspiracy to commit honest services mail fraud, bribery, money laundering, multiple counts of wire fraud, mail fraud, disclosing public contract information, and other charges.

Some of those projects of which Montague shared information with what the government called “Business 75” — described as an integrated design firm with offices across the country — came about after Montague was hired out of retirement by Dayton’s VA in March 2011. He took that post in the wake of a scandal surrounding a dentist’s unsanitary practices that may have led to hepatitis infections of nine dental clinic patients.

Montague almost immediately began breaking the law, according to federal officials. Prosecutors said he had VA medical center employees do research that he shared with clients of his consulting firm, House of Montague.

Starting in January 2010, Montague, Business 75, and employees of the company conspired to defraud the VA of its right to the honest and faithful service of Montague through bribery and kickbacks and to defraud the VA and other potential VA contractors by means of false and fraudulent pretenses, according to the indictment.

On March 1, 2011, Business 75 issued a $20,000 check payable to Montague. He deposited the money into the House of Montague’s account.

On the day Montague was hired in Dayton, Business 75’s principal sent an email to some employees that included Montague’s consulting agreement, explaining, “His job is to help us bring in more work from the VA, in part by helping us access key decision-makers,” according to the indictment.

According to court documents, a Business 75 employee said in an email that “we may have lost Montague” after Montague was named director of the VA in Dayton. Montague was the Cleveland VA’s director from 1995 until 2010 and worked in other VA jobs since 1975.

Instead, federal prosecutors say Montague routinely billed Business 75 for $2,500 in consulting fees while he traveled to Washington on official VA business. He also submitted government expense reports for the same travel expenses. The VA projects around the country often were worth millions of dollars. Business 75 has not been indicted.

In April 2011, Montague received an email from a VA employee regarding a draft ethics guideline, stating that Montague’s private business “must be kept out of the VAMC and not involve use of VA equipment or supplies … Further, his business activities may not involve the use of non-public information.”

Montague stopped working for Dayton’s VA in December 2011, at about the same time the indictment said a Business 75 employee wrote an email saying that Montague “had been a good investment this year, in my opinion, but I do not want it to become permanent. Plus I think his ability to collect valuable info will diminish over time.”

On Sept. 14, 2011, according to indictment, Business 75 Employee 5 replied to Business 75 principal’s email and included Business 75 Employee 11: “Interesting math — At $30k per year for BILL, we would have to win ($)300,000 in VA fee(s) every year ($30k profit) for us to break even. I think VA West LA is worth $20,000,000.”

Documents indicate Montague’s relationship with Business 75 continued well after he stopped working for Dayton’s VA, including checks being cashed as late as March 2013. Similar allegations involving other businesses go back as far as 2007 in Cleveland.

“VA directors who use their official position for personal enrichment will be held to account,” said Gavin McClaren, U.S. Department of Veterans Affairs-Office of Inspector General, Resident Agent in Charge in Cleveland.

“Our nation’s veterans deserve public officials and contracts who serve veterans’ needs and not their own.”

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