The Law According To Moses
Contractors Plead Guilty To Faking Minority Status
By Ambrose Moses, III
A contractor from Merritt Island, Fl., and executives at two Arlington, Va.-based businesses have pleaded guilty to fraudulently obtaining more than $31 million in government contract payments that should have gone to minority and disadvantaged small businesses through the SBA 8(a) Program.
The United States Attorney and other officials made the announcement after the pleas were accepted by a United States District Judge.
“These executives used their knowledge and experience to abuse a program created to ensure minority small business owners could compete for government contracts,” said U.S. Attorney MacBride. “They not only illegally obtained millions from the United States, they also victimized legitimate minority owners who didn’t get the bids.”
The“…co-conspirators fraudulently obtained valuable government contracts intended for minority-owned small businesses, and pocketed millions of dollars for themselves,” said Acting Assistant Attorney General Raman. “They abused an important government program, and will now face the consequences.”
The contractor was charged with one count of major government fraud and faces a maximum penalty of 10 years in prison. As part of his plea agreement, the contractor has agreed to forfeit $2.9 million.
The contractor admitted that in 2005, he learned that an executive at an consulting company referred to as Company A in court records, illegally controlled Company B, another consulting company. Company B was a participant in the SBA “Section 8(a)” program. Although the executive of Company A controlled Company B, Company B had obtained its 8(a) status based on the disadvantaged status of a minority female, its nominal owner.
The contractor agreed to pay the executive and Company B a fee in exchange for Company B allowing the contractor to use its 8(a) status to obtain U.S. government contracts. Company B was required to perform at least 50% of the work on the contracts and had represented it would do so. However, no Company B employees actually performed any work. Instead, the contractor and others did all of the work as independent contractors, but they concealed that fact from the government agencies.
Moral of the story: MBE, EDGE, FBE, WBE, DBE, and 8(a) certifications are serious business. Work with knowledgeable and ethical attorneys, accountants, and advisors to keep your activities legal and above reproach.
For more information contact Ambrose Moses, III, an attorney with Moses Law Office. Email: info@MosesLaw.pro. Telephone: (614) 418-7898.
