A small business and its owner have agreed to pay $250,000 to resolve HUBZone fraud allegations, including a claim that the company’s HUBZone office was a “virtual” location where no employees actually worked.
According to a Department of Justice press release, Air Ideal, Inc. and its majority owner have also agreed to pay the government five percent of the company’s gross revenues over the next five years.
A HUBZone contractor has been accused of HUBZone program fraud for allegedly falsely claiming to be located in a HUBZone, when in fact the office in question was a “virtual office” where no employees worked.
According to a Department of Justice press release, the contractor not only misrepresented its principal office location, but submitted a fabricated lease to the SBA as part of its HUBZone application.
The Department of Justice has filed a complaint accusing an Ohio construction contractor and its owner of fraudulently obtaining HUBZone certification and HUBZone set-aside contracts.
According to a DOJ press release, the government is alleging that William Richardson, the owner of TAB Construction Co. Inc., made false statements regarding TAB’s principal office to obtain HUBZone certification, then used that certification to win millions of dollars in HUBZone set-aside contracts.
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.
Last week, I had the honor of returning to Washington, DC and giving a presentation at the National HUBZone Conference on best practices for remaining HUBZone compliant. The presentation addressed critical ongoing HUBZone compliance issues, including the principal office rule, 35% employee residency rule, and other HUBZone eligibility rules.
Many thanks to Mark Crowley and the HUBZone Council for inviting me to be part of the conference. And a big “thank you” to my engaged audience of HUBZone companies, which asked many great questions and probably could have kept going all morning if there had been time. Finally, thanks to my sister Karen, for allowing me to use her apartment in Van Ness as my personal HUBZone Conference hotel and introducing me to Comet Ping Pong while I was in town.
If your company is HUBZone certified, but you weren’t able to make it to this year’s National HUBZone Conference, never fear. My presentation slides are now up on the Past Presentations page. Enjoy!