The Eastern District Court bought the gravel down on two federal contractor executives for SBA 8a small business fraud and abusing the Small Business Administration’s (SBA) 8a contracting program to obtain more than $31 million in contracts unlawfully. See case where defendants were sentenced to 27 and 15 months in prison.
Small business owners, and government executives alike, can experience severe penalties for SBA fraud with government contracts for small businesses, criminal or civil, for procurement violations for 8a Program fraud.
Many companies fall short of adequate legal representation because they retain traditional legal defense counsel without experience in federal contract law. This gives the government attorneys an advantage in the case.
However, there are many situations where prosecutors or criminal defense attorneys may not quite understand how federal indictments and SBA government contract fraud charges must incorporate the underlying statutes that govern the 8a certification, HUBZone or other small business programs.
Underlying Theories of Government Contract Fraud & SBA Fraud Where 8a Government Contractors Are Targeted
Typically, allegations of SBA fraud by government contractors involved in small business contracts or 8a small business fraud against a contractor will include:
- Adopting and furthering a procurement fraud scheme that attempts to defraud the government for funds that SBA 8a contracting programs do not allow
- A non-disadvantaged member being in control of the business against SBA Program regulations
- Wire Fraud
- Conspiracy in government contract fraud
- Pass through procurement fraud scheme practices
With applying the underlying statutory regulations that govern specific legal terms of art under procurement laws, the result would be that the SBA 8a Program participants, or other government SBA fraud defendants, would be subject to one set of laws under a civil analysis, termination actions by the SBA, and be subject to a different standard under criminal litigation for the pass through scheme. See information about the Mandatory Disclosure Rule.
SBA Fraud Complaints – Protecting Your Rights in Government Contract Cases is Essential
When it comes to government contracting for small companies, businesses and individuals have certain constitutional rights whether they are state or federal. For example, certain indicted defendants for SBA fraud and pass through procurement fraud scheme practices may not have been provided their administrative due process rights where the SBA small business fraud complaints may not have given notice that someone is doing something wrong.
The SBA typically terminates an 8a government contractor from the program non-compliance with 8(a) rules. The SBA is required to the notify the participant of its intent to terminate and give some level of process. See 13 CFR 124.304
Still, in some federal indictments, facts may show there was no action by the SBA when the suspected government contract fraud occurs but yet there is a criminal indictment in existence. See Criminal Defense for Defrauding SBA Disadvantaged Small Business Program
SBA Fraud Cases – Pass Through Scheme & Criminal Conspiracy in the 8a Government Contract Program
Many SBA fraud cases include an allegation of a conspiracy between defendants and using a procurement fraud schemes approach. The U.S. attorney will have to show the relevant elements of the conspiracy charge.
A problem can occur when one of the parties in good faith believes that it is in compliance with 8a statutory provisions, or has no reason to believe that it is conspiring to the defraud the government.
- These are all issues of contention in SBA 8a contracting criminal litigation.
Having the right government contractor fraud defense attorney that is experienced with the nuances of SBA fraud complaints and federal small business programs in government contracting is essential when addressing indictments and SBA 8(a) criminal charges.
For help in an SBA fraud, HUBZOne or 8a small business fraud cases against your company for using a pass through scheme, contact Watson’s contract and procurement government contract fraud defense lawyers at 1-866-601-5518. Speak to Theodore Watson or John Scorsine Defense Attorney.