Faking Economic Disadvantage for DBW, MBE or WBE Status

Millions of Dollars Won for Whistleblowers in Atlanta

Do you know of a company that is lying about its income or the net worth of its owners so that it can qualify as a DBE, MBE or WBE?

Congress has ordered government agencies to reserve some of their contracts for smaller companies that don’t have access to easy capital and credit. Some ruthless larger companies are lying about their economic status to wrest these contracts from the disadvantaged business enterprises (DBEs) they were intended to help.

If you are aware of a company misrepresenting itself to secure government contracts, we encourage you to contact us to help the government stop DBE fraud. Successful whistleblowers not only stop fraud, they also are entitled to 15% to 30% of what the Government gets back from the company that cheated.

Schedule a FREE consultation about filing a suit under the False Claims Act: (888) 581-9132.

Congress Wants to Help Small, Disadvantaged Business Enterprises (DBES)

Congress believed our nation would be better off and more prosperous if we encouraged these small businesses, and it passed laws enabling the small business association to get some of these contracts and pass them on to disadvantaged business enterprises. Obviously, though, for the law to be effective, the firms that got the work must actually be small companies.

Although the government inks enormous numbers of procurement contracts a year, Congress noticed that virtually none were going to small businesses owned by minorities, women, and disadvantaged individuals and groups. These companies had trouble getting loans and bonds that would enable them even to bid on the government contracts.

If you know a big company that is lying about its assets in order to get contracts intended for small businesses, file a False Claims Act lawsuit to help end this fraud. You may be entitled to between 15% and 30% of the money the Government recoups from the perpetrator. Lee Wallace of The Wallace Law Firm, LLC has won millions of dollars for clients and has handled legal matters in over 20 states.

She has been recognized for her outstanding advocacy by:

  • Georgia Super Lawyers®
  • Top 100 Trial Lawyers
  • Top 50 Women Lawyers

DBE Fraud: Too Many Assets

To qualify for DBE (or SDB, “small disadvantaged business”) status, a company must be at least 51% owned and controlled by individuals who are socially and economically disadvantaged. The company also has to meet certain size standards, because obviously the Small Business Administration (SBA) is not designed to help companies unless they are small, disadvantaged businesses. The SBA sets rules about whether a business qualifies as “small” and the rules vary by industry.

To calculate the size of a company, the SBA generally looks at:

  • The company’s annual receipts
  • Number of employees

To learn more about how the SBA calculates annual receipts and number of employees, click here.

DBE Fraud: Not “Economically Disadvantaged”

If a company is not “economically disadvantaged”, it will not be certified as a DBE. For example, the Department of Transportation, which hands out highway construction contracts, is clear that it will not certify a company as a DBE unless:

  • . . . each individual owner of the firm applying as a DBE whose ownership and control are relied upon for DBE certification [must] submit a Personal Net Worth statement (PNW) certifying that his or her PNW does not exceed $1,320,000.

DBE Fraud: Too Much Income (Not Meeting The “Income Requirement”)

The Small Business Association also sets a “size standard” – i.e., rules about how much income a business can take in and still be considered for the DBE program.

When the individuals who own a business develop a higher net worth, or the business begins to net a higher income, the business is “promoted.” Of course the company can still do business with the Government, but it no longer needs the extra help and support that Congress envisioned smaller businesses would need.

To figure out whether an individual qualifies as having “diminished capital and credit opportunities, the statute directs the government agencies to look at the individual’s assets and net worth. For Indian tribes, the agency considers: “the per capita income of members of the tribe excluding judgment awards, the percentage of the local Indian population below the poverty level, and the tribe’s access to capital markets.”

Consult Our Atlanta Whistleblower Attorney for Free: (888) 581-9132

If you are interested in finding out how we can help you blow the whistle on DBE fraud, do not hesitate to ask our firm. Whistleblowers can report businesses pretending to be eligible for DBE, MBE and WBE (disadvantage business enterprises, minority business enterprises, and women-owned business enterprises) status. We can review your case and confirm whether your suspicions of fraud are valid.

Contact our firm at (888) 581-9132 to find out more.