Federal officials have filed new fraud and conspiracy charges against the former head of Department of Veterans Affairs medical centers in Cleveland and Dayton, who is accused of taking bribes from businesses seeking more than $1 billion in agency contracts.
William D. Montague, 61, took payoffs either directly or through the consulting company he created in 2008, the House of Montague, in exchange for inside information on future construction and other contracts, according to the federal indictment announced Wednesday.
He also helped his clients squeeze additional money from federal jobs by finding ways to “fill up the bucket” when the cost of actual work fell short of the total authorized payment, according to the indictment.
Montague was director of the Cleveland VA Medical Center from 1995 until February 2010. He headed the Dayton VA Medical Center in 2011. The payoffs were made while Montague still worked at VA, according to the charges.
His position gave him access to internal planning documents at the agency, information he passed on to his consulting clients in exchange for lucrative fees of as much as $2,000 per day, according to the charges.
Montague was originally charged in June with 36 counts of fraud and money laundering for allegedly accepting bribes and kickbacks from a Cleveland area contractor.
The new indictment added 29 counts, including conspiracy to commit fraud, mail and wire fraud, and violations of the Hobbs Act, which deals with obstructing interstate commerce by using force or official powers.
The companies Montague did business with are not identified by name, but rather monikers such as “Business 75,” the firm involved in most of the big transactions alleged in the new indictment.
Business 75 was identified as “an integrated design firm with offices throughout the United States, including New York, Illinois, Virginia, Missouri and California.”
The company performed work for VA directly or through participation in joint ventures and other agreements with other firms.
“From January 2010, Montague, Business 75 and employees of the company conspired to defraud the VA of its right to the honest and faithful service of Montague through bribery and kickbacks, and to defraud the VA and other potential VA contractors by means of false and fraudulent pretense,” the indictment said.
“Montague secretly used his position as Dayton VA Medical Center director to enrich himself and his designees by soliciting and accepting gifts, payments and other things of value from Business 75 in exchange for favorable official actions,” the indictment said.
An internal email from the company describes a VA contract with a cap of $15 million that had produced about $12 million in actual sales.
“One of Montague’s jobs will be to fill up the bucket by directing task orders toward our contract,” the March 2011 company email stated.
“Going forward, we have two $15 million buckets to fill. That’s a lot of shoveling to get to $30M. Bill has the relationships to help us maximize the contracts.”
That same email references other pending VA construction contracts worth more than $1 billion for projects in Los Angeles, San Francisco and Alameda, Calif., and Reno, Nev.
“Montague told us about these before they were advertised, which has allowed us to get an early start in developing the team,” the email stated.
Another email from the same company describes Montague’s help in securing the list of future VA construction contracts.
That memo, dated September 2011, stated that without Montague’s help the company would not know about those projects until they were publicly announced the following February.
When a different company balked at the fee Montague was charging through his consulting firm, he responded with an email describing his access to inside information.
“I have just, for example, obtained the priority scored list of all scored projects for next fiscal year,” Montague said in a July 2011 email to a company identified as Business 74.
“This is considered the motherlode (sic) by my other clients, all of whom pay more than $5,000 a quarter,” he said in the email.
Montague bragged he had obtained a list of all top priority VA construction projects through 2022, according to the indictment.
The total amount paid to Montague is not listed in the indictment. Business 75 paid him $70,801. Another firm paid $156,750.
Montague’s VA salary in 2011 was $179,700, according to federal salary data compiled and published by the Asbury Park (N.J.) Press.
Documents obtained by the Washington Examiner show he received $81,986 in performance bonuses from 2007 through 2011.
Montague is among the more than 60 public officials and contractors implicated in a federal investigation of corruption in Cuyahoga County, according to the Cleveland Plain Dealer.
Montague’s lawyer, Ralph Cascarilla, could not be reached for comment.