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DOJ Continues to Crack Down on SBA Fraud

May 25, 2017 By Jeffrey Belkin

On April 25, 2017, the DOJ announced that Michelle Cho, an officer of Far East Construction Corporation and other companies, received both prison time and civil penalties for her involvement as the mastermind of a fraudulent scheme to defraud the Small Business Administration’s (SBA) 8(a) program. Under this scheme, Cho would bid for set-aside contracts for small, disadvantaged businesses under the SBA 8(a) program. However, Cho’s companies would not perform this work. Instead, other large companies would perform this work and pay 3 percent of the proceeds to Cho’s companies. This is another example of the DOJ’s efforts to crack down on SBA fraud and a reminder that large government contractors working with small businesses like Cho’s should make sure to review their small business compliance procedures to avoid any potential issues.

The full press release can be found here.

Filed Under: Government Contract-Related Investigations and the False Claims Act Tagged With: Fraud, Small Business Administration (SBA)

About Jeffrey Belkin

Jeff Belkin is a partner in the firm’s Construction & Government Contracts Group. Jeff represents contractors in False Claims Act and internal investigations, claims litigation and procurement protests, and advises on complex compliance issues.

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This blog is a service of Alston & Bird’s Government Contracts team and provides insights on cases, rules, trends, and latest developments in local, state, and federal government contracting. Our attorney observations include analysis of investigations, litigation, protests and issues affecting present or prospective prime contractors, subcontractors, and grant recipients across various industries.

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