The owner of a former 8(a) program participant has been sentenced to 21 months in prison in connection with an 8(a) program “pass-through” scheme.

Under the plea agreement, the former 8(a) program owner also agreed to three years of supervised release and the forfeiture of $554,541.07.

Last fall, I wrote about Wesley Burnett, a non-disadvantaged individual accused of conspiring with Yogesh Patel, an 8(a) company’s owner, to obtain 8(a) contracts that would be performed by Burnett’s non-8(a) companies.  Now, according to a recent Department of Justice press release, Patel has been sentenced to prison for his role in the scheme.

According to the DOJ, Patel was the majority owner of United Native Technologies Inc., which was engaged in the information technology services business.  UNTI was certified as an 8(a) program participant in 2005.

In 2007, Patel met Burnett at a business conference.  The two agreed that they would use UNTI to bid upon 8(a) set-aside contracts for construction work.  Burnett’s companies would perform all of the work on the contracts.  In exchange for the “pass-through” use of UNTI’s certification, Burnett would pay Patel 4.5 percent of the value of the awarded contracts.

For awhile, the scheme worked.  Between October 2010 and July 2013, UNTI was awarded nearly $2.7 million in set-aside contracts.  During this time, Patel continued to certify to the SBA (presumably as part of UNTI’s 8(a) annual updates) that no outside entities or individuals provided support to UNTI.

But eventually, the scheme unraveled.  Burnett pleaded guilty last fall, and was sentenced to 42 months in prison.  Now, his co-conspirator will join him behind bars.

When the topic of pass-throughs comes up, I occasionally hear from people who incorrectly think that the government will not penalize a disadvantaged individual for his or her role in such a scheme.  These people seem to believe that the government will lay all the blame at the feet of the non-disadvantaged co-conspirator.  But as Yogesh Patel’s case demonstrates, an 8(a) certification is not a bar to prosecution.  Yes, in this case, Wesley Burnett–the non-disadvantaged conspirator–ended up with more prison time.  But Patel did not escape with a mere slap on the wrist.  Twenty-one months in federal prison is no laughing matter.