FRAUD: DBE Contracts Deal Cost Construction Company $1.8 Million

February 3, 2016

The Department of Justice announced Tuesday that MCC Construction Company in Colorado pled guilty in federal district court to one count of knowingly and willfully conspiring to commit major fraud on the U.S. and agreed to pay a $500,000 fine and forfeit $1.3 million in a plea deal.  

DOJ said MCC conspired with two companies to use their small business status to win contracts and then illegally perform the work. By doing so, MCC won 27 government contracts worth over $70 million from 2008 to 2011 and in return, the companies were given 3 percent of the contract value. State and federal agencies often set disadvantaged business enterprise (DBE) participation goals at 5-10 percent or more, making billions of dollars available to qualifying construction DBEs.

Paul Abbate, assistant director in charge of the FBI’s Washington Field Office, said in a news release, "An uneven marketplace is created when businesses engage in illegal backroom deals to fraudulently obtain government contracts, placing competitors at an unfair disadvantage."

MCC Construction's plea deal will be heard March 15.

Source: The Hill