There have already been a number of high profile small business enforcement actions this year, an enforcement trend we discussed in our April 7 webinar, and a conviction from a federal jury in New York is the latest sign that this trend is continuing.
Between June 2007 and June 2010, John Raymond Anthony White’s company, Mitsubishi Construction Corp., obtained four contracts set aside for veterans or service-disabled veterans with the Department of Veterans Affairs for construction work in New York, Pennsylvania, and Maryland. Mr. White used his alleged military status as a service-disabled veteran to establish Mitsubishi Construction Corp.’s eligibility for competing for and receiving these contracts.
However, there was one problem—Mr. White never served in the military and lied about his status as a service-disabled veteran. When the contracts came under investigation, Mr. White compounded the problem by trying to hide the fraud by claiming that an Army veteran actually owned 51% of Mitsubishi Construction Corp. In doing so, not only did Mr. White fail to cover up the fraud, but he found himself facing additional charges for lying. On April 20th, he was convicted of fraud and lying for his actions and now faces a maximum of 75 years in jails and a possible fine of $3.75 million. He will be sentenced on July 20, 2011.
Although this is a case of egregious fraud, it is worth noting that companies should always take care to verify their size and eligibility status for every contract they bid on. Even making an innocent incorrect certification can have devastating consequences.