Owner of Will County medical supply company learns sentence in VA kickback scandal

BOLINGBROOK, Ill - The owner of a suburban medical supply company was sentenced this week to five years in federal prison for paying kickbacks to a U.S. Department of Veterans Affairs employee in exchange for securing medical equipment orders.

Darren A. Smith, 60, of Hazel Crest, was convicted earlier this year on eight counts of wire fraud, according to prosecutors.

Between 2017 and 2020, Smith, who operated a medical distribution company based in Bolingbrook, conspired with a procurement clerk in the Veterans Health Administration’s Prosthetic Service in Chicago. They arranged for the VA to order costly medical equipment from Smith’s company in return for undisclosed kickbacks to the clerk.

The orders placed by the clerk involved unnecessary and overpriced rentals of medical equipment from Smith’s company, rather than the outright purchases that VA physicians had recommended. 

As a result, the VA spent more than $2.7 million on Smith's equipment, fraudulently overpaying by more than $1.3 million.

In exchange for his illegal activities, the clerk received at least $220,000 in kickbacks from Smith.

In addition to his prison sentence, Smith was fined $10,000 and ordered to pay over $1.3 million in restitution. 

The clerk, Andrew Lee of Chicago, pleaded guilty to a wire fraud charge before the trial and is currently awaiting sentencing.