Fraud is Fraud

Whether it takes place in the Defense Dept. or in the small business world.

• Over the past two years, at least 10 Washington area companies have won more than $100 million in prime government contracts set aside for small businesses in economically distressed areas by claiming they had residency in those communities.

The fraud is on the part of the unscrupulous/non-existent contractors. It was Small Business Administration incompetence, blatant disregard, or other inadequacies that allowed these frauds to collect taxpayer funds by lying about their status.

• ..a roofing contractor with a $4.1 million Air Force contract listed his business as being in a Landover distressed zone. When government investigators visited, the office was in half of a duplex and a person who identified himself as a vice president said no employees worked there. According to payroll records, only 12 percent of the company's employees lived in the zone,..
• As a test of the program's screening process, investigators created fictitious companies and submitted applications for the Historically Underutilized Business Zone program. Four of them won certification, even though one listed a Starbucks as its company address and the employee and company information was fabricated on all the applications, GAO investigators told committee members.
• Last year, administration officials quashed legislation that would have required on-site visits of applicants and other measures to ensure businesses' eligibility, calling them "burdensome or undesirable."

In effect, the Administration said, "let fraud roll." Nice.
- posted by john @ 5:14 PM