Two Myrtle Beach men to pay nearly half a million dollars for federal Rent-a-vet scheme

Two Myrtle Beach residents were sentenced in federal court for committing fraud against the US. Department of Veterans Affairs.

DiGorio Jr., 66, and Edward Kessler, 69, who both formerly lived in Pittsburgh, pleaded guilty to the fraud charges and were sentenced Aug. 13, 2024, to one year of probation, including 100 hours of community service, and ordered to pay a fine of $50,000, along with $403,142 in restitution to the U.S. Department of Veterans Affairs, according to a press release.

DiGorio and Kessler were the owners of two construction companies, ADDVETCO Inc., and Hi-Def Contracting Inc., operating in Pittsburgh, according to the release. DiGorio and Kessler formed the companies for the purpose of bidding on and acquiring “set-aside” contracts issued by the VA to small businesses owned and operated by service- disabled veterans of the U.S. military and pre-certified by the VA as Service-Disabled Veteran-Owned Businesses. Neither DiGorio nor Kessler had served in the military, nor were they service-disabled, the release said.

DiGorio and Kessler executed a classic “Rent-A-Vet” scheme, in which they paid service-disabled veterans to falsely represent themselves as the primary owners and operators of their businesses to falsely attest to ownership of the companies on critical documents submitted to the VA as part of the service-disabled veteran-owned businesses certification process.

During the period of 2007 to 2018, ADDVETCO and Hi-Def were awarded 67 contracts that were intended for such businesses, 50 of which were valued at $1 million or more. The two charges to which DiGorio and Kessler each pleaded guilty in March 2024 arose from the two most recent contracts awarded to the companies, for which the defendants received more than $400,000 in profits, the release said.

In imposing the sentences, U.S. District Judge William S. Stickman IV emphasized the serious nature of the defendants’ offenses and their shameful disregard for the disabled service members who had served their country, characterizing the defendants’ conduct as akin to “stolen valor.”