Ronald Hurst will serve two years in prison for conspiring to commit bribery and wire fraud from January 2006 until September 2007, the Department of Justice announced.
In addition, a second former repair contractor, Bryant Carbonell, was also sentenced by Judge Philip Reinhard of the U.S. District Court for the Northern District of Illinois to six months of home confinement for his role in this scam.
Both defendants were ordered to pay $147,825 in restitution to the VA.
Hurst and Carbonell worked for West Palm Beach, Fla.-based Ocwen Loan Servicing and their scheme affected the Veterans Affairs Mortgage Guarantee Program.
Ocwen managed foreclosed properties under contract with the VA, which guaranteed qualifying residential mortgages for veterans. As part of the contract, if a veteran defaulted, Ocwen completed repairs at the housing unit and resold the asset. Proceeds generated from the resale of VA-acquired properties directly benefit the VA by reducing the cost of guaranteeing residential mortgages to veterans.
But a court indictment revealed that the defendants paid Ryan Piana, a former residential sales manager at Ocwen, to direct housing maintenance work to companies affiliated with them. Piana also recruited and paid other Ocwen employees to join this scheme, court documents said.
In order for this scam to be completed, the DOJ said the conspirators sent various transmissions via wire communication.
By paying kickbacks in exchange for contracts to companies they secretly owned, the conspirators created the illusion of competition while illegally steering contracts to themselves, said Bill Baer, assistant attorney general in charge of the Department of Justices Antitrust Division.
This is the third wire fraud case in the last three years involving properties managed by Ocwen under contract with the VA.