Lack of understanding SBA 8(a) Regulations Can Put Criminal Defendants at Risk
On the issue of defrauding SBA Disadvantaged Small Business Program, there many recent small business government contract 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.
There is a vast amount of regulations that govern the SBA 8(a) program. When companies face criminal liability for violating government procurement law, the facts of each case is 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. To better position themselves for a better result, small business owners may want to develop a legal team that includes professionals such as a whistle blower lawyer or procurement fraud criminal defense attorney, 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.
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.
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.
Government contract 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, the Defendant never reveals that he is 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.
Proving control 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 of how to determine control.
What you will generally see in a SBA procurement fraud case alleging control violations, is that the U.S. attorney will make the allegations but fail to prove at 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.
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 to the standard that SBA cases are held to at OHA.
Small Business Fraud Schemes- Underlying Legal Issues When Charged With Government Contract Fraud in the SBA Small Business 8a Program
Conspiracy to commit government contract fraud is a criminal charge that has serious penalties. When individuals are charged with small business fraud 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.
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 on the 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, seeking the help of a whistle blower lawyer or 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. 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 small business fraud, SBA 8(a) Program or other small business benefits carry 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 cases involving defrauding SBA Disadvantaged Small Business Program, procurement fraud schemes, or help with call our fraud prevention and federal government procurement fraud and government contracts attorneys at 1-866-601-5518. FREE INITIAL CONSULTATION.
Speak to John Scorsine for Legal Representation.