A recent SBA procurement fraud schemes and corruption case resulted in four retired and one active-duty Army National Guard official pleading guilty to their role in procurement fraud crimes under the SBA 8(a) Program.
The result and consequences of procurement fraud and corruption ended in the award of millions of dollars in marketing, retention, and recruitment contracts. Indictments, in this case, alleged that Sines and Rappoccio evaded the competitive bidding process by using 8a companies in exchange for bribes.
The National Guard Bureau procured the mentioned contracts under the Small Business Administration’s 8(a) Certification Program. Government employees and contractors must be aware of serious criminal penalties under the Anti-Kickback Statute and other procurement fraud schemes and corruption laws that can have serious criminal consequences and penalties. See full DOJ decision here.
Note: When hiring a government contract fraud federal criminal defense lawyer, make sure that you hire one that understands government contracts and legal issues important to SBA Corruption in government contracting in addition to federal criminal laws. One without the other can produce disastrous results.
Increased Procurement Fraud Schemes and SBA 8(a) Fraud Corruption Oversight: According to the Department of Defense INSTRUCTION, NUMBER 7050.05, dated May 12, 2014
SBA Fraud Investigation of Government Contract Fraud Schemes
All DOD components are required to investigate all significant SBA fraud investigations of government contract fraud schemes or corruption related to procurement activities affecting its organization.
The Instruction also emphasizes that “all possible criminal, civil, contractual, and administrative remedies are identified to cognizant procurement and command officials and Department of Justice (DOJ) officials, as appropriate, and that appropriate remedies are pursued expeditiously.”
- There is no doubt that government contractors are subject to increased scrutiny for procurement fraud crimes including SBA 8(a) fraud and SBA corruption.
- Consequences of SBA OIG government contract investigations allegations and indictments can have a grave impact on contractors and federal employees involved in the procurement process.
There seems to be a special increase in procurement fraud under the 8 a Program. Given the unique statutory power for 8(a) certified companies to get federal government contracts outside of the competitive process; it can be very tempting for large businesses and non 8(a) certified companies to become involved in procurement fraud and SBA corruption schemes.
Do You Have Rights as a Targeted Government Contractor? As a federal contractor charged with government contract fraud, you may at some point be wondering if you are under investigation. Chances are that you are. If the IG’s office is asking questions or the contracting officer is inquiring about your invoices or small business size status in the middle of contract performance, then you would want to know your rights up front.
In Government contract and SBA fraud investigation cases, many CEOs are not certain as to what legal rights they have or what they can do or not do. You always should cooperate with federal law enforcement agencies such as the Inspector General (IG) or the Federal Bureau of Investigation (FBI). However, you also have constitutional rights that can potentially harm you in a criminal proceeding if those rights are not safely guarded. If you suspect or have a reason to know that your company is being investigated, then seek a federal government contractor fraud defense attorney immediately. Your rights as a contractor may be at risk. See information about avoiding liability for PPP loan fraud.
Do You Understand Government Small Business Regulations? Many government contract fraud cases involve small businesses that may have innocently broken the law or were not aware that they were committing a criminal act. Government small business regulations can be very confusing. However, by the time your company is targeted for some level of procurement fraud scheme, the damage may have already been done. Whether you are a prime contractor facing criminal allegations for violating the limitations on subcontracting clause; or facing a criminal indictment for an alleged pass-through contract under the SBA small business program, you want to make sure that you have a government contract fraud defense lawyer that also understands government small business regulations when it comes to the SBA 8(a) Program, Service Disabled Veteran Owned Small Business Program or HUBZone programs.
Many criminal defense attorneys are not familiar with the underlying procurement law principles alleged in government small business fraud or false claims cases. Make sure that you protect your legal rights early.
What Can You Do if Your Company is Under Investigation? If your company is under investigation for government contract fraud allegations, you want to cooperate as much as possible but without violating your legal and constitutional rights. Never lie to federal investigators. You have a right against self-incrimination under the constitution and you may want to promptly consult with a government contractor defense attorney that understands the issues being investigated.
SBA 8(a) Fraud & HUBZone Fraud
Many federal government contract fraud cases may involve alleged violations of the SBA’s HUBZone program. HUBZone fraud cases are becoming more and more common in federal small business contracting. Many cases involve companies entering into subcontracts but violating the limitations on subcontracting regulations – hence, an alleged pass-through HUBZone contract. If you are a construction company, criminal allegations of not meeting the HUBZone employee requirement may be at issue. Regardless of the allegations, you may also be facing individual criminal liability as well as corporate liability. SBA procurement HUBZone fraud cases can be tricky simply because the federal prosecution may also attach false claims act liability and conspiracy charges to each contract or invoice submitted to the government for payment. If you are facing these types of situations, under SBA fraud investigation, contact a HUBZone fraud defense lawyer for immediate help.
SDVOSB Fraud and Corruption in Government Contracting
Corruption in government contracting that involves small businesses can involve some very complicated facts when veterans are involved. Another type of government contract fraud case involves SDVOSB fraud specifically. Since the rules are very unique for veterans to win government contracts, large businesses and small teaming partners can find themselves facing a civil or criminal lawsuit alleging fraud against the government. The government allegations stem from pass-through government contract fraud schemes or false certifications to the government. Many government contractors find themselves at odds with the allegations because they are not familiar with the various rules that involve teaming agreements, joint ventures, or limitations on subcontracting. As with most government small business fraud cases, federal prosecutors will also bring criminal false claims charges, wire fraud, and others. This would be a time to seek a government contract fraud lawyer and a small business attorney or SDVOSB fraud defense lawyer.
SBA 8(a) Government Contract Fraud. Schemes
The most popular government contract fraud scheme cases stem from SBA 8(a) fraud allegations. If you are being investigated, this program includes many complex nuances that many traditional defense attorneys are not familiar with. Given the high priority given the 8(a) program, it appears that sentences tend to be more drastic for criminal defendants. Again, subcontracting regulations can be confusing, the affiliation regulations associated with government contract small business fraud can be tricky. If you are subjected to allegations of criminal conduct under the SBA 8(a) Program, seek an SBA 8(a) fraud defense attorney that understands the rules. Learn about Mail and Wire Fraud Against the Federal Government.
Find out more about Criminal Defense for Defrauding SBA Disadvantaged Small Business Program.
For questions about representation in a government contract investigation and consequences of procurement fraud schemes, SBA fraud investigation and corruption in government contracting, call our white-collar business fraud lawyers and procurement fraud criminal defense attorneys, for a free initial consultation. 1-866-601-5518.