But Stewart, 35, did not have the specialized masks and had no ability to get them, he admitted in Alexandria federal court Wednesday.
“Mr. Stewart sincerely believed he had the ability to . . . deliver the masks,” defense attorney Robert Jenkins said. He said Stewart, who had never received a federal contract before, was led astray by an unnamed third party who had promised the goods and then failed to deliver.
“He clearly knew he was misrepresenting what was available to him at that moment,” Jenkins said. “So then he started on a series of efforts, in desperation, to get the items in hand.”
Some of those efforts were chronicled by a reporter for ProPublica, who joined Stewart on a fruitless cross-country private plane trip in search of the elusive mask supply.
“Awarding a $34.5 million contract to a small company without any supply chain experience,” he told the reporter. “Why would you do that?”
The private plane, according to prosecutors, was paid for in part with $261,500 Stewart fraudulently obtained in coronavirus relief by inflating the number of employees his firm has. Stewart also admits he falsely claimed to be a decorated Marine, garnering over $73,000 in excess VA benefits.
Stewart’s company, Federal Government Experts, is one of hundreds that received a lucrative federal contract related to the pandemic response despite a lack of appropriate experience in government contracting, according to congressional investigators. Jenkins said Stewart is cooperating in that investigation.
Stewart reached out to both VA and FEMA in early April, according to court records, and promised to deliver more than 6 million masks within two weeks. VA offered to pay him $34.5 million, and FEMA $3.5 million, according to court papers. He then began asking for extensions, at one point sending officials photos he falsely claimed showed boxes of masks ready for delivery.
After several weeks went by and the masks were not delivered, both contracts were canceled. No money was lost on the contracts. But the fraud “undermined the government’s ability to provide much needed [personal protective equipment] to the community, including to the front-line health-care workers serving our military veterans,” Raj Parekh, acting U.S. attorney for the Eastern District of Virginia, said in a statement.
At the time, thousands of veterans in VA hospitals had contracted the coronavirus, and there were not enough N95 masks for the health-care workers tending to them. In a December union survey, 40 percent of VA workers said they still faced shortages of protective gear.