The City of Philadelphia flagged eleven (yes this one goes to eleven) prime contractors for flaunting the City of Philadelphia’s DBE rules according to the City of Philadelphia Office of Inspector General.  According to the news release, the chief offender, William H. Betz, Inc., may have gotten off easy.  According to the OIG, Betz facilitated contracts between JHS & Sons Supply Company and ten prime contractors whereby:

providing JHS’ minority business certification and the supplies necessary to complete the job. As a result, Betz received more than $640,000 worth of business that was intended for legitimate minority-owned companies. JHS received at least $70,000 for acting as a pass-through.

As a result of a settlement agreement with the City, Betz agreed to repay the City $128,000 and is ineligible for City contracts for two years.  Why is this getting off easy?  Because the arrangement alleged by the OIG could have easily led to federal prosecution of Betz officials involved with the scheme.  For you to be indicted for DBE fraud, there is no requirement the project be owned by the federal government or be funded by it.  There is no actual crime known as “DBE fraud” and DBE regulations to not prescribe criminal penalties for violation of DBE rules.  Rather, DBE fraud almost invariable involves the federal crimes of mail fraud and wire fraud, which are the crimes that DBE fraudsters are prosecuted for.