THE RISK IS REAL: On January 13, 2014, the Department of Justice announced that two former executives of Schuylkill Products, Inc. had each been sentenced to 2 years in federal prison and forced to pay $119 million is restitution because of their role in what the FBI called the largest ever fraud involving the Department of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) Program. A third individual, the owner of the firm that was used as a “front” or “pass through” firm, Marikina Construction Corp., in the scheme received a prison sentence of nearly three years.
The sentencing of these individuals is not the result of an isolated incident. In recent years, we have become aware that federal prosecutors and the DOT Inspector General have significantly stepped up enforcement of the DOT’s DBE Program and have brought several high profile cases resulting in civil penalties and jail time.
The stakes are indeed high for contractors that do not abide by the DOT’s DBE rules. In addition to facing a federal investigation for violating DBE rules, contractors who flout the rules can see bids challenged and lost and be forced to defend costly whistleblower lawsuits. Furthermore, contractors that operate under a State or Local DBE program are not immune to risk.
You can help protect your firm from these avoidable problems by having a cost effective DBE Compliance Audit performed. We assist firms throughout the country in identifying potential DBE Program compliance issues and assist them in implementing changes to their standard operating procedures so that they can avoid criminal investigations and expensive lawsuits. The DBE Rules are complex and a DBE Compliance Audit is one way your firm can help avoid the cross hairs of the prosecutor’s gunsight.
To learn more on how we can help assure that your company complies with Federal, State, or Local DBE rules, please email Wally Zimolong at firstname.lastname@example.org or call at (215) 665-0842.