SBA Fraud Explained By a NY Defense Lawyer
In August of 2012, the Small Business Administration (SBA) obtained close to $256,000 in a judgment against a podiatrist who had applied for a loan guaranteed by the SBA. The podiatrist was reportedly dishonest about his financial situation when submitting the loan application, failing on his loan application to disclose that he had been sued. Before the loan was disbursed, the podiatrist had a judgment entered against him in the lawsuit for close to $900,000. The podiatrist declared bankruptcy, but did not list the Small Business Administration as a creditor. These actions formed the basis of the legal claims SBA made against the defendant.
The Small Business Administration (SBA) is a government agency, so defrauding this agency will have the same consequences as defrauding any other agency or organization which is part of the federal government. It is likely to lead to jail time and serious possible consequences including large financial loss. If you have been accused of SBA fraud or of any type of business fraud, it is imperative you understand your legal options and explore defense strategies. Bukh Law Firm, PLLC can provide you with aggressive and knowledgeable legal representation as you fight to avoid the consequences associated with conviction for any type of fraud charge.
Understanding SBA Fraud
The Small Business Administration offers myriad programs and benefits to companies and entrepreneurs throughout the United States. The SBA believes fraud is a threat to its mission and thus takes a strict stance towards allegedly fraudulent behavior which results in a misuse of Administration funds. According to the SBA, the agency “works closely with the Department of Justice and the Inspector General to seek redress for any fraud or misrepresentation.”
The SBA gave examples of defendants charged for intentionally misleading statements, material omissions, the submission of false information, or other dishonest behavior in connection with any Small Business administration program. Examples included:
- Making fraudulent statements to participate in a HUBZone Program in order to receive program benefits. One man, for example, was sentenced to a year imprisonment and required to pay almost $7 million for falsely representing the location of his office location for purposes of obtaining a HUBZONE certification necessary to qualify for federal contracts.
- Submitting false statements to the Small Business Administration. Two companies paid $6.25 million to resolve allegations of submitting both false claims to the Army and fall statements to the SBA. Contracts had been set aside for certain qualifying companies which were part of the Historically Underutilized Business Zone but companies improperly claimed to be a part of these zones so they could bid on and obtain military contracts.
- Making false statements to qualify for loans guaranteed or provided by SBA. This includes providing false information about your financial situation.
- Making fraudulent statements in connection with Section(8)(a) programs. Section 8(a) aims to encourage small companies to get government contracts. In particular, the focus is on helping disadvantaged women or minorities to compete for the contracts.
- Diversion of SBA funds to large corporations through fraudulent means. In a 2005 report, the inspector general of the SBA described this as one of the “most important challenges facing the SBA.”
These are just a few of many types of fraud which may be occurring in connection with the Small Business Administration. Any type of business fraud can result in serious charges, but the consequences may be much more harsh if the SBA is involved because of its role as a government agency.
how a New York City Criminal Defense Lawyer Can Help
Bukh Law Firm, PLLC has extensive experience representing defendants accused of fraud claims, including when the government is involved as the party who was allegedly defrauded. Our experienced legal team can provide invaluable guidance in fighting the very serious charges which can result when claims are made that you tried to improperly obtain funds or benefits from the government. Give us a call as soon as possible to learn more.