Crystal Lake business owner charged with defrauding veterans

Crystal Lake business owner charged with defrauding veterans


By Robert McCoppin



Tribune reporter



7:38 PM CDT, August 21, 2012



A Crystal Lake business owner who ran a nonprofit for disabled and homeless veterans was indicted Tuesday on charges that he defrauded veterans and the military for money, federal prosecutors said.



John Blanchard, 51, of Crystal Lake, owner of several businesses including the National Association of Systems Administrators, Inc., was charged with fraudulently obtaining and carrying out federal contracts meant to help veterans, according to a press release from the U.S. Attorney’s office in Rockford.



Also charged, according to the Department of Justice, were four people who had worked for Blanchard’s companies: his wife, Joanne Blanchard, 49, of Crystal Lake, who managed the finances and payroll for her husband’s companies; his brother, James Blanchard, 55, of McHenry, who was a project manager for Liberating Solutions Corp. and managed security; Eric Behler, 51, of Curlew, Wash., who was a contracting officer for Liberating Solutions; and Amy Johnson, 50, of Elkhart, Ind., who oversaw NASA Education.



None of the five people indicted could be reached for comment late Tuesday.



The indictment alleges three different scams.



In one, prosecutors said, the defendants falsely claimed that the majority of Liberating Solutions was owned by veterans who were disabled in the military. That was a requirement to quality for certain federal contracts, authorities said.



To win other federal and local contracts, prosecutors charged, the defendants indicated their businesses would pay veterans prevailing wages, based on a survey of the rate of pay to other workers in the area, as required by law, but did not.



Prosecutors also charged that the defendants allowed NASA Education, a not-for-profit corporation, to keep excess grant funds from its Stand Down events by padding expenses. Some invoices claimed that security for the vets was provided by Bull Dog Security, though security had been provided by unpaid veterans.



The NASA Education Website states that Blanchard served eight years in the U.S. Navy and in 1997 founded NASA Corp., a software development company. The following year, the site says, he established NASA Education to prepare disabled, homeless and other veterans for work and reintegration into the community, including housing, counseling and job training.



NASA Education hosted a twice-annual Stand Down event for veterans, combining a job fair with charitable giveaways of clothing and services.



The indictment by a federal grand jury includes a total of six counts of wire fraud, one count of mail fraud and 10 counts of providing false statements and documents. Each count of wire and mail fraud carries a maximum penalty of 20 years in prison, and each count of false statements carries a maximum penalty of five years, plus fines of up to $250,000.



rmccoppin@tribune.com



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