SBA Fraud - Criminal Defense for Defrauding SBA Disadvantaged Small Business Program

Defending small business fraud cases involving government contracts can be a contractor’s worst nightmare. Hiring local criminal defense counsel that is experienced in federal procurement law can be equally challenging. Federal prosecutors know this. Hence, the higher percentages of convictions for them. Learn how to increase your chances of prevailing.

On the issue of defrauding the government under the SBA Disadvantaged Small Business Program, there many recent small business government contract SBA fraud cases where the Department of Justice, SBA Inspector General, and other government entities have investigated and indicted Small Disadvantaged Business (SDB) owners for committing procurement fraud under the SBA 8(a) Program.

Who are you hiring and what do they know about government contracting rules? There is a vast amount of regulations that govern SBA fraud cases. When companies face criminal liability for violating government procurement law, the facts of each case are critical.

Many companies are now facing civil and criminal penalties for violating the limitations on subcontracting rules, submitting false claims and invoices or even conspiracy to defraud the government. These are very serious charges. Yet, many companies might rely on traditional criminal defense attorneys to represent them during government investigations or criminal proceedings.

You may be paying criminal defense attorneys to learn federal procurement law: To better position themselves for a better result, small business owners may want to develop a legal team that includes professionals such as small business government contracting fraud lawyers or procurement fraud criminal defense attorneys, that understands federal government contract law and that can better team with criminal counsel. 

  • Without such a consideration, the government’s attorney may have an easier time proving the elements and sub-elements (concerning government contracts) during litigation of small business fraud cases.

What exactly are the False Claims Buy American Act Rules?

 If the government would not have purchased the items from the contractor, had it been aware of the infractions, the contractor has committed fraud against the United States. Government contractors are found guilty and made to repay the federal government through the application of the Buy American Act and US Trade Agreements Act and attaching the Federal False Claims Act implications.

In one SBA 8(a) Program Fraud Case,  a Defendant pleaded guilty to conspiring to defraud the United States in connection with schemes to fraudulently seek federal contracts under a Small Business Administration program to assist socially and economically disadvantaged small businesses and to defraud the IRS. Did the government prove the important parts of the underlying case? A valid defense in most cases when defrauding SBA disadvantaged small business program is to show that the defendant did not violate the underlying procurement regulations. In most cases, when this strategy is not taken then most defendants may think that they have no other choice but to settle the case. See information about PPP Loan Fraud.

Criminal charges for these types of procurement SBA fraud cases typically include: Conspiring to defraud the government, lack of fraud prevention programs, false tax returns, submitting false financials to the SBA and various counts of wire fraud. See also information about SDVOSB fraud.

Government contracting fraud and indictments usually suggest that a Defendant in a case caused a disadvantaged person to submit an application to the SBA Section 8a program. However, Defendant never reveals that he is in actual control of the business.

To further develop their case on government procurement fraud, U.S. attorneys will also suggest that there was an underlying scheme where the defendant coerced or conspired with the 8(a) certification program applicant to get government contracts and pass the money on the Defendant.

Avoid SBA Fraud Penalties for Size Misrepresentation

Under SBA rules for small businesses, there are dangerous penalties for contractors that willfully misrepresent their small business size status for the purpose of soliciting or getting federal government contracts. SBA fraud penalties are harsh and can include jail time and or high civil penalties. To avoid criminal or civil liability for small business size status misrepresentations, all small business government contractors doing business with the federal government should consult with their SBA lawyers to verify that they are accurately representing your size status. If the SBA OIG or DOJ investigates your company for alleged size misrepresentation, you want to have adequate mitigation facts in place.

Proving control in small business fraud cases is one area where there are differing opinions when a procurement fraud investigation case is on the way.

Under the SBA 8(a) Program and other small business regulations, there are statutory definitions and case law that address these complicated issues. 13 CFR 124.106 creates the statutory guidelines on how to determine control.

What you will generally see in an SBA procurement fraud case alleging control violations, is that the U.S. attorney will make the allegations but fail to prove in court that the defendant was actually the highest-paid. By contrast, when SBA decisions are appealed at the SBA Office of Hearings and Appeals (OHA), the level of details and facts looked at by the court is substantially more than what the criminal case will show. See information about How to Minimize Criminal Liability in Government Contracting Fraud and Procurement Investigations.

There are varying opinions as to whether in a criminal case whether the government must be held to the same standard of proving all of the underlying allegations as the standard that SBA cases are held to at OHA.

SBA Small Business Fraud Cases – Underlying Legal Issues in Government Contract Fraud Litigation

Conspiracy to commit government contract fraud is a criminal charge that has serious penalties.  When individuals are charged in small business fraud cases with the  SBA Small Disadvantaged Business 8a Program fraud, facts, and hard evidence should be presented to prove the government’s case.

Burden of proof in small business fraud cases: Proving government procurement fraud to the level of “beyond a reasonable doubt” is a very high standard.  Making suggestions to a grand jury that incidents may have led to conspiracy simply does not meet the legal burden of proof.

SBA Fraud Lawyers – Defending Small Business Fraud Cases

Mail and Wire fraud, when charged with charged defrauding SBA 8a Certification Program fraud, is a catchall where the allegations suggest that the Defendant committed mail and wire fraud by using fax machines, e-mail or other mechanisms through interstate commerce to submit the fraudulent and false information to the government contracting agency to get funds. Once the government succeeds in the SBA fraud schemes, conspiracy, control issues etc, then it is easier to prevail on the wire fraud issues.

Getting the proper criminal defense: Many defendants in a case involving procurement fraud schemes under SBA Disadvantaged Small Business Program, or simply the 8(a) program, seek traditional criminal defense attorneys to defend the case. Depending on the specific facts of your case, seek the help of what exactly is the False Claims Buy American Act Rules . SBA fraud lawyers should be familiar with the various nuances of government contracting.

What is the definition of Buy American Act Fraud? If the government would not have purchased the items from the contractor, had it been aware of the infractions, the contractor has committed fraud. Government contractors are found guilty and made to repay the federal government through the application of the Buy American Act and US Trade Agreements Act, and attaching the Federal False Claims Act implications, hiring an SBA fraud lawyer or a federal procurement fraud defense attorney may be a more viable choice.

Government contracts law is very unique and carries a vast level of complex issues. Small business fraud attorneys should be well-versed in the various aspects of SBA 8(a) Program regulations and the nuances that arise. In addition, knowing the regulations involved in contract performance is an essential part of case preparations.

Without this level of expertise, criminal defendants charged with defrauding SBA Disadvantaged Small Business Program can find themselves in a precarious position.

Defending against criminal cases involving SBA fraud cases, SBA 8(a) Program or other small business benefits carries serious consequences. There are varying opinions as to how federal cases are presented in court. However, criminal defendants should make sure that they have the right people on their team. Find out more about our Government Contractor Defense support services.

For help with small business fraud cases involving defrauding the Disadvantaged Small Business Program, or government procurement fraud schemes, or help with call our small business fraud lawyers and federal government procurement fraud and government contracts small business attorneys at 1-866-601-5518. FREE INITIAL CONSULTATION.

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