Suburban medical supply company owner sentenced to 5 years for overcharging Chicago VA $1.3 million

The owner of a Bolingbrook medical supply company was sentenced to five years in federal prison Thursday for overcharging the Chicago Veterans Health Administration Prosthetics Service while paying kickbacks to a VA employee to facilitate the transactions, the U.S. attorney’s office said in a release.

Darren Smith, a 60-year-old Hazel Crest resident, was convicted earlier this year on eight counts of wire fraud, and was ordered to pay a $10,000 fine and $1.3 million in restitution for what he overcharged the VA office, prosecutors said. He will be on supervised release for two years after serving his sentence.

“This sentence should send a message that corrupt VA employees will be rooted out and prosecuted,” said Gregory Billingsley, Special Agent-in-Charge of the Department of Veterans Affairs and Office of Inspector General’s Central Field Office, in a statement. “These fraudulent activities erode public trust and divert taxpayer money intended for our nation’s deserving veterans.”

Between 2017 and 2020, the VA spent more than $2.7 million at Smith’s company after he and former VA procurement clerk Andrew Lee set up “unnecessary and more expensive rentals” of medical equipment from Smith’s company rather than purchasing the equipment, as he had been instructed by VA physicians, prosecutors said. Lee also made smaller transactions that would undergo less scrutiny, according to court documents.

Lee, a 68-year-old Chicago resident, received more than $224,000 in kickbacks, which, among other things, took the form of cash and payments on his mortgage, according to court documents. He pleaded guilty to wire fraud this year and is awaiting sentencing, which may also include restitution payments.

Smith is due to turn himself in to the Bureau of Prisons Jan. 20, 2025, according to court documents.