Whistleblowing on Businesses that Fake Ownership & Control

Atlanta False Claims Act Attorney

Do you know a company that is faking its ownership in order to get DBE, MBE or WBE contracts? Some companies are scooping up construction and other government contracts by pretending to be owned by someone who qualifies for the disadvantaged business enterprise (DBE), minority-owned business (MBE) or woman-owned business (WBE) programs. If you know about a company doing this, discuss whether you can help stop this fraud by filing suit under the False Claims Act (FCA). Our lead attorney, Lee Wallace, has been practicing for over 25 years. An honors grad of Harvard Law School, she represents whistleblowers like you and has recovered millions of dollars for her clients.

Whistleblowers who file False Claims Act lawsuits can help not only halt fraud on these types of programs, but they can alsoreceive 15-30% of what the Government collects from the companies that cheated to get the contracts.

Find out whether you have a valid case during your FREE initial consultation.

How the Government Determines DBEs

To encourage small businesses, Congress has directed federal agencies to set up programs to ensure that small, socially and economically disadvantaged business enterprises (DBEs) get at least a minor percentage of the work parceled out by the agencies each year.

15 U.S.C. § 637 explains what factors the government will use in determining whether a business qualifies as a “socially and economically disadvantaged small business concern” for DBE, MBE or WBE. Since the point is to help businesses whose owners have traditionally been shut out of government contracts, obviously one of the factors is the “ownership and control” of the company.

To qualify, a business must be at least 51% owned and controlled by:

  • “Socially and economically disadvantage individuals;”
  • “an economically disadvantaged Indian tribe” or a business it wholly owns; or,
  • “an economically disadvantaged native Hawaiian organization.”

15 U.S.C. § 637(a)(4)(A)(i)(1).

Identifying DBW, MBE or WBE Fraud

Some companies who want government work have decided to take an end run around the program, by faking who owns the company. The fraud runs along two distinct lines, but the outcome is always the same. Some companies get the contracts for themselves by pretending that a particular person owns the company – although that person in fact is not a 51% owner.

Other businesses use a more indirect path to the fraud. These businesses set up fake companies that really are owned by people who might qualify, but the smaller companies are not actually performing the work; it all passes through to the bigger company that set up the fraud.

Find out how you can be a whistleblower who helps stop companies from pretending they are owned by minorities, women or disadvantaged people or businesses. A past President of the Georgia Association for Women Lawyers, Attorney Lee Wallace graduated first in her class from Vanderbilt University. She has been named one of Georgia’s Super Lawyers®, Top 100 Lawyers, Top 100 Trial Lawyers, and Top 50 Women Lawyers. She only represents whistleblowers like you, not the companies sued under the False Claims Act.

Examples of DBE Fraud Whistleblower Cases

* In 2013, several Ohio-based companies and their owners agreed to pay the Government $2,883,947 to resolve allegations that they had faked the ownership of a disadvantaged business enterprise (“DBE”) to get federally-funded transportation projects. According to a DOJ press release, Testech and Ceso Agree to Pay $2.88 Million to Resolve False Claims Act Allegations, the companies faked the DBE status of Testech, a civil engineering firm.

TesTech supposedly was a DBE owned by Sherif Aziz, but a whistleblower, Ryan Parker, reported that the company in fact was owned and controlled by CESO, a large, Dayton-based company handling federal transportation projects in five states. In its press release, DOJ said that the defendants had “falsely claimed that TesTech was owned by Aziz and qualified as a minority-owned business in order to take advantage of the DBE program.”

Parker filed suit under the False Claims Act. As a relator (commonly known as a whistleblower), Parker received $562,370 of the $2.88 million that the government collected.

Consult an Experienced Atlanta Whistleblower Lawyer for FREE

Talk to us about whether you can blow the whistle on companies faking their ownership in order to snatch contracts from real DBEs, MBEs and WBEs. Whistleblowers have the satisfaction of helping the government stop fraud, and they are entitled to 15% to 30% of what the Government recovers from the cheating company.

Begin by calling (404) 550-4615 to talk to our team.