Nicholas Borton reached a plea deal and is scheduled to be sentenced in August. No court dates have been scheduled in Moore’s case. Charges include conspiracy to file false claims, make false statements and wire fraud.
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Court records allege Moore and Borton fraudulently held out KLSS Solutions as a set-aside business qualified as a Service Disabled Veteran-Owned Small Business (SDVOSB).
The filings say a law was passed in 1999 aiming for at least 3 percent of government prime and subcontracts be awarded to businesses owned and operated by service disabled-veterans or their caregivers.
Kelley’s Logistics Support Systems (KLSS) was organized in 1997 as a Woman-Owned Small Business (WOSB) to provide services to the U.S. government and aerospace industry, according to the indictment.
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In 2008, a separate company named KLSS Solutions was organized as an Ohio corporation by founders Steven T. Powers, Anita Kelley-Powers (Powers’ wife) and Borton (Powers’ son-in-law), according to state business filings. Court records say it did business as a SDVOSB.
Court records say Powers “was in fact a service disabled veteran.”
In 2009, Moore became the controlling owner of KLSS and Borton became president of KLSS and KLSS Solutions, court records say.
In January 2013, due to a terminal illness of Powers, Moore and Borton recruited someone identified as “M.L.H.” to serve as a “straw man” owner of KLSS Solutions because he was a service disabled veteran, court documents said. Powers died Feb. 27, 2013.
An online obituary for Powers says he died Feb. 27, 2013, from lung cancer and brain cancer due to Agent Orange exposure. It says KLSS was Powers’ “dream come true” accomplishment.
“It just made me sick when I saw it,” said Kelley-Powers by phone about the fate of the business.
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“M.L.H.” didn’t do any actual work or management of KLSS Solutions and didn’t receive any compensation, according to court records, which also listed various documents that allegedly show the conspiracy.
Between March 2013 and June 2014, according to court documents, KLSS Solutions was awarded 15 subcontracts for NASA and was paid $1,411,452. In March 2008, KLSS Solutions was awarded a Dept. of Air Force (DAF) prime contract worth $148,619.
“It was an object of the conspiracy that KLSS Solutions be used as a subterfuge to secure United States Government services contracts and subcontracts for KLSS,” Moore’s indictment alleged.
At its peak, KLSS employed 57-75 people and KLSS Solutions had none, court records allege, and they were co-located in the same building, according to the indictment.
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Messages were left with Moore’s and Borton’s attorneys, who didn’t return calls.
The assistant U.S. attorney handling the case didn’t return a message seeking comment.
KLSS Solutions was officially dissolved April 6, 2017, according to the Ohio Secretary of State’s website.
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