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VA contractor says payment was justified

The FBI is looking into whether a Swedish company padded a contract at the Tampa VA hospital, a builder says.

Published March 10, 2005

TAMPA - An FBI investigation of a construction project at James A. Haley VA Medical Center focuses on a $63,000 payment between contractors, a target of the probe said Wednesday.

Joel Velasco, who oversaw construction of the Spinal Cord Injury Center at Haley, said he met with federal investigators in Atlanta three weeks ago.

Velasco is a foreman with Alabama-based Dawson Building Contractors, which built the 60-bed, $25-million spinal center at the hospital.

In a telephone interview from Puerto Rico on Wednesday, Velasco said federal agents were focusing on a $63,000 cashier's check he received in January 2001 from Peter Castelli, a former executive with Sweden-based Liko Inc.

Liko installed overhead patient lifts at the spinal center.

Velasco said investigators wanted to determine whether Liko had padded the contract at the facility, which has treated scores of soldiers injured in Iraq.

Velasco said he told Tampa FBI agent Scott Cheney and an agent with the Veterans Affairs Department's Office of Inspector General that the money was payment for work he did for Liko on the side.

Velasco said Castelli ran into problems installing the lifts, used to move patients, and turned to him for help. Velasco said he helped design the system and worked for Liko 12 to 20 hours a week for three months.

"The only reason I got involved with Castelli is because they couldn't figure how to get the job done; They were floundering pretty bad," Velasco said.

"There was nothing to hide, and there was nothing that was done out of the ordinary. There was no hanky-panky or corruption or fraud or anything else."

In hindsight, Velasco said, he should have signed a contract with Liko.

Velasco said he would not have accepted a cashier's check if he thought he was breaking the law.

The St. Petersburg Times obtained a copy of the draft, drawn at Bank of America by Castelli. The check is made out to Velasco.

Since meeting with investigators, Velasco said he had spoken with Castelli, and that Castelli planned to meet with the FBI last week.

Castelli declined to comment when contacted by the Times. But in a letter submitted in December to the Food and Drug Administration, which regulates medical equipment, Castelli said he had provided investigators with evidence about Liko that was part of a criminal investigation by the FBI.

"I am not at liberty to discuss any of the particulars," Castelli wrote, "but I feel it might be vital to your organization in learning the true intent of Liko Inc. here in the USA."

Neither investigators nor Richard Fritz, a lawyer who represents Liko, responded to messages seeking comment.

Velasco said he met with investigators for an hour and a half.

In addition to the cashier's check, he said they wanted to know why the price for the lift system had gone from $378,000 - Liko's initial proposal - to $680,000. Velasco said that change orders requested by the VA had driven up the cost.

"They didn't understand the entire process," Velasco said, referring to investigators. "They did not understand the VA process."

Liko is the subject of a separate investigation by the FDA because of several patient lift accidents around the country, one of them fatal.

Paul de la Garza can be reached at or 813-226-3432.

[Last modified March 10, 2005, 01:13:09]

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