Defrauded Government on a $218,241 NIFC Contract

BOISE – McDonald Roofing and Construction, Inc., of Boise, Idaho, was sentenced today in United States District Court to three years of probation and fined $5,000 for fraud related to government contracting, U.S. Attorney Wendy J. Olson announced. On March 15, 2012, the company pleaded guilty to an information charging it with one count of wire fraud.

According to court documents, McDonald Roofing and Construction, Inc. pled guilty to defrauding the United States Department of Interior on a $218,241 contract for work to be performed at the National Interagency Fire Center (NIFC) in Boise, Idaho. The contract was awarded to the defendant corporation on the basis that it was an eligible HUBZone entity, when in fact, it was not. The U.S. Small Business Administration's (SBA) HUBZone Program encourages economic development in historically underutilized business zones through the establishment of preferences in federal contracting opportunities. McDonald Roofing Corporation admitted that it made false statements to the SBA concerning its eligibility for HUBZone contracts.

“By falsely representing its eligibility for a federal contracting preference, McDonald Roofing Corporation violated the public's trust,” said Olson. “This contract should have been awarded to a contractor that was actually prioritizing economic development in underserved areas. I commend the cooperative investigative work of the many federal agencies involved in this successful prosecution, who well understand the need to protect taxpayers' money.”

“The HUBZone Program offers significant benefits to eligible small businesses and is an important tool for unlocking the potential of historically underutilized business zones,” said Inspector General Peggy E. Gustafson of the Small Business Administration. “Preferences for federal contract awards must not be given to persons who lie in order to claim eligibility. I applaud the dedication and perseverance of our law enforcement partners as justice is served here today on behalf of the American taxpayer.”

In a related case involving the company Construction Service Corporation, Inc., of Boise, Idaho, and a fraud on the HUBZone Program, Chief U.S. District Judge B. Lynn Winmill stated that “this is a serious matter. The programs were intended to promote economic activity in disadvantaged areas. The crime undermines confidence in these important public programs.” Construction Service Corporation was also sentenced to three years of probation and fined $65,000 for fraud related to government contracting.

The case was investigated by the Small Business Administration - Office of Inspector General (OIG); the Department of Agriculture OIG; the General Services Administration OIG; the Department of the Interior OIG; Internal Revenue Service-Criminal Investigation; the Department of Veterans Affairs OIG; the Army Criminal Investigation Command; the Department of Defense Criminal Investigative Service; and the Air Force Office of Special Investigations.