Former Veterans Affairs Official Agrees to Plead Guilty to Federal Charges after Taking Bribes for Years from Parking Lot Operator

Topics:  David Richard Scott, Westside Services

U.S. Attorney’s Office
Central District of California
12 January 2018

FOR IMMEDIATE RELEASE

LOS ANGELES – A former contract officer with the United States Department of Veterans Affairs was charged today with filing a false federal tax return and lying to VA investigators when he denied taking bribes from the operator of parking lots at the VA’s Los Angeles medical campuses.

Ralph Tillman, 58, of Whittier, who was a VA contract officer until he resigned in 2014 after being confronted by special agents with the VA’s Office of Inspector General, was named in a criminal information filed today that charges him with making false statements and subscribing to a false tax return.

In a plea agreement also filed today, Tillman agreed to plead guilty to the two felony offenses and admitted that he took well over $250,000 in bribes from the parking lot operator, Richard Scott, the owner of Westside Services LLC (WSS), which for years had a contract to operate parking lots across the VA Greater Los Angeles Healthcare System (VA GLAHS).

Scott, 58, faces charges – including conspiracy and major fraud against the United States – contained in a 15-count indictment returned by a federal grand jury last month. Scott allegedly paid bribes to Tillman to conceal a scheme in which he allegedly failed to pay the VA more than $11 million generated by his operation of parking facilities at VA GLAHS. The vast majority of the activity authorized under the WSS contract took place at the West Los Angeles VA Medical Center near Westwood.

As part of his duties at the VA, Tillman was responsible for managing contracts with “sharing partners,” such as WSS, which were required to perform services for the VA and share revenues with the agency. In his plea agreement, Tillman admitted that he approached Scott in late 2003 and solicited a bribe to pay for a family matter. One to two years later, Scott began making monthly cash payments to Tillman, with Scott personally delivering the bribes in sealed FedEx envelopes, according to the plea agreement.

In return for the cash bribes, Tillman admitted in the plea agreement that he failed to scrutinize annual statements from WSS that Tillman knew contained inaccurately reported revenues and expenses. Tillman also admitted that he knew Scott was defrauding the VA out of millions of dollars, and that he entered into a contract extension with WSS in 2011 to continue the fraud and bribery scheme.

During an interview with special agents with VA’s Office of Inspector General in September 2014, Tillman denied accepting money or anything of value from Scott. This conduct forms the basis of the false statements charge.

Tillman specifically admitted that he took $286,250 from Scott from 2003 through last year. According to the plea agreement, Tillman continue to receive money from Scott after his retirement and these payments constituted “hush money.”

Tillman failed to report the bribe payments on his federal tax returns, and he agreed to plead guilty to subscribing to a false tax return for the 2014 tax year.

Tillman has agreed to appear in United States District for an arraignment on January 31.

Once he pleads guilty to the two offenses charged in the criminal information, Tillman will face a statutory maximum sentence of eight years in federal prison.

The VA contract with WSS was terminated in early 2017 after the VA settled a lawsuit that challenged the VA’s use of its West Los Angeles campus for any purposes not specifically related to the care and housing of veterans. Pursuant to an agreement, WSS was allowed to continue to operate the parking lots until this month.

During an arraignment last month, Scott pleaded not guilty to the charges contained in the indictment. He is currently scheduled to go on trial before United States District Judge R. Gary Klausner on February 6.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

The cases against Tillman and Scott are the result of an ongoing investigation being conducted by the United States Department of Veterans Affairs, Office of Inspector General; the Federal Bureau of Investigation; and IRS Criminal Investigation.

These cases are being handled by Assistant United States Attorney Ruth C. Pinkel of the Public Corruption and Civil Rights Section.

Contact:
Thom Mrozek
Spokesperson/Public Affairs Officer
United States Attorney’s Office
Central District of California (Los Angeles)
213-894-6947

Press Release Number:
18-005