While criminal prosecutions involving construction company executives violating federal, state, and local disadvantaged business enterprise programs (DBE) rightfully receive most of the attention, of equal or greater concern to contractors should be whistleblower lawsuits brought under the False Claims Act for violations of DBE regulations.  As I talked about in my recent DBE compliance webinar

Another week and another case of DBE fraud resulting in significant fines.  This one involves Connecticut construction firm that agree to pay $2.4 million in fines to settle the fraud allegations.  The story follows an all to familiar “pass through” fact pattern:  a construction company obtains transportation contracts, commits to performing work using certain DBE

Mega-law firm Wilmer Hale recently published a its 2013 False Claims Act Year in Review.  The report is an insightful read for any business dealing with the federal government.  However, two statistics in particular should stand out for the construction industry:
  • False Claims Act suits hitting an all-time high of 753 in 2013, and
  • Government

As we have written about before, DBE fraud involving a pass-through scheme, whereby a certified DBE performs no commercially useful function but receives a a commission for allowing their status to be used by a prime contractor, is by far the most common form of DBE fraud.

While less common, but no less illegal, is

Criminal indictment is not the only threat to contractors who fail to follow the Department of Transportation’s Disadvantaged Business Enterprise (DBE) regulations.  While the risk of jail and civil fines is real, it is limited to those contractors that knowingly violate the DBE rules by engaging in a scheme to use the DBE program to

Join us for a webinar on Mar 27, 2014 at 2:00 PM EDT.

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https://attendee.gotowebinar.com/register/5788498068269059073

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

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