Two Kentucky-based government contractors and their owners have agreed to pay $6.25 million to settle HUBZone fraud claims, according to a U.S. Department of Justice press release.
The costly settlement puts an end to a saga involving DOJ claims of a vacant “principal” office, undisclosed affiliation, and fraudulent statements made to the SBA and and the U.S. Army.
An Idaho man has pleaded guilty to a HUBZone fraud charge. According to a U.S. Department of Justice press release, last week, Patrick Large, the owner of Quality Tile and Roofing Inc., pleaded guilty to one count of wire fraud resulting from a HUBZone scheme.
Large admitted defrauding the government by falsely representing the location of two employees, apparently in order to satisfy the SBA’s “principal office” requirement for HUBZone firms. Based on Large’s representation, the SBA admitted Quality Tile to the HUBZone program. Quality Tile subsequently won a HUBZone set-aside contract valued at approximately $220,000.
As part of the guilty plea, Large agreed to pay $150,000 in restitution. However, he still faces the possibility of additional penalties, including prison time. He is scheduled to be sentenced on January 8, 2013.