- Associated Press - Monday, August 25, 2014

DES MOINES, Iowa (AP) - A Nebraska businessman and two construction companies he controlled pleaded guilty to criminal charges, admitting to a scheme to obtain millions of dollars in contracts that were meant to go to companies run by disabled veterans.

Ram Hingorani pleaded guilty to major program fraud Friday under an agreement that is expected to resolve a long-running case in federal court in Des Moines. Midwest Paving, Inc., pleaded guilty to money laundering, while Midwest Contracting, Inc., pleaded guilty to major program fraud and wire fraud.

Prosecutors dismissed charges against Ronald Waugh, a disabled Vietnam-era veteran from Glenwood, Iowa.

Under the plea agreement, the government will ask for no more than two years in prison for Hingorani, a 49-year-old father of four daughters. He and the two companies face restitution orders that have not been calculated. Midwest Paving will have to forfeit no more than $3.3 million in profits, the amount that the government has already seized. Sentencing dates have not been scheduled.

Hingorani and Waugh started Midwest Contracting in 2007 claiming that Waugh controlled its operations, which allowed the company to participate in a program that gives preference to small businesses owned by service-disabled veterans. Waugh was designated as service-disabled for hearing loss in 2007 and tinnitus in 2008. Hingorani, who is not a veteran, admitted in the plea agreement that he actually ran the company’s daily operations and had an option to purchase Waugh’s shares at any time.

Midwest Contracting won more than $23 million in contracts for construction work for the Department of Veterans Affairs in Des Moines and Omaha and at Offutt Air Force Base in Nebraska.

Hingorani’s attorney, Mark Weinhardt, said he will ask U.S. District Judge Stephanie Rose to give his client a sentence of probation.

Waugh’s attorney, Leon Spies, told The Des Moines Register, “Mr. Waugh and his family are heartened that the government recognized that he is not personally responsible for the charges.”

The men and the companies had been scheduled to stand trial earlier this month.

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