Ex-Con Contractor Busted for $3.3M Fort Drum Scam

Former Construction Contractor Sentenced for Crimes Involving Fort Drum Contracts

Syracuse, New York – Sean O’Sullivan, age 61, of Sackets Harbor, New York, was sentenced yesterday in federal court in Utica to 2 years of probation and ordered to pay $345,271.34 in restitution to the United States after previously pleading guilty to conspiracy to commit wire fraud in relation to government contracts and conspiracy to commit an offense against the United States by offering and giving gratuities to a former Fort Drum contracting officer.

The announcement was made by United States Attorney Carla B. Freedman; Brian J. Solecki, Acting Special Agent in Charge, Department of Defense Office of Inspector General Defense Criminal Investigative Service; Joel Kirch, Special Agent in Charge, U.S. Army Criminal Investigation Division, Northeast Field Office; Joseph Dattoria, Special Agent in Charge of the General Services Administration, Office of the Inspector General (GSA-OIG), Northeast Region Investigations Office; Christopher A. Scharf, Special Agent in Charge, Department of Transportation Office of Inspector General, Northeastern Region (DOT-OIG); and Amaleka McCall-Brathwaite, Special Agent-in-Charge, Eastern Regional Office, Small Business Administration, Office of Inspector General.

The wire fraud conspiracy related to government contracts O’Sullivan fraudulently obtained with his former business partner, David Rose, of Newport News, Virginia, which had been “set aside” solely for Service-Disabled Veteran-Owned Small Businesses (“SDVOSBs”). To be designated as an SDVOSB, a construction company must meet certain criteria, including that a military veteran with a disability rating incurred as a result of military service must own the majority of the business and personally manage and control its daily business operations.

In pleading guilty previously, O’Sullivan admitted that he conspired with David Rose to defraud the United States by bidding for and obtaining contracts set aside for SDVOSBs, to which they knew they were not entitled. Specifically, O’Sullivan and Rose incorporated and became co-owners of a construction company named Sierra Delta Contracting, LLC. O’Sullivan controlled and managed Sierra Delta and bid on and obtained contracts primarily at Fort Drum in Watertown, New York. Although Rose is a service-disabled military veteran, O’Sullivan is not. However, O’Sullivan certified to federal agencies that Sierra Delta was an SDVOSB by representing, falsely, that Rose personally managed and controlled Sierra Delta’s day-to-day business operations.

Between May 2014 and July 2017, Sierra Delta bid on and received multiple construction contracts from the Army at Fort Drum, New York, and one construction contract from the U.S. Department of Transportation. All of the contracts were 100% set aside for SDVOSBs. Each time Sierra Delta received one of these set aside contracts to which it was not entitled, O’Sullivan hired SOS Inc. – his own construction company – as the primary subcontractor on the fraudulently obtained contracts, enabling O’Sullivan to retain the majority of the resulting profits. Sierra Delta received more than $3.3 million in gross revenue from these fraudulently obtained contracts, and O’Sullivan has admitted that he personally received $345,271.34 in profits from the scheme.

O’Sullivan’s scheme was exposed when two different government agencies challenged Sierra Delta’s SDVOSB status and questioned whether Rose actually managed the construction company on a day-to-day basis. In response, Rose falsely claimed that he “control[led] the long term and day to day operations of Sierra Delta Co

The investigation and prosecution of O’Sullivan’s crimes were the result of a collaborative effort between the Department of Justice, the Department of Defense Office of Inspector General, the U.S. Army Criminal Investigation Division, the General Services Administration Office of Inspector General, the Department of Transportation Office of Inspector General, and the Small Business Administration Office of Inspector General.