News and Press Releases

Boise Construction Company Sentenced on Government Fraud Scheme

June 06, 2012

Fined $65,000 for Wire Fraud and Making False Statement

BOISE – Construction Service Corporation, Inc., of Boise, Idaho, was sentenced today to three years of probation and fined $65,000 for fraud related to government contracting, U.S. Attorney Wendy J. Olson announced. On March 28, 2012, Construction Service Corporation, Inc., pled guilty to wire fraud and making a false statement to the government.

At the sentencing today, 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.”

According to court documents, Construction Service Corporation, Inc., pled guilty to defrauding the United States Department of Agriculture on a $274,283 contract for roofing work to be performed at a research facility in Corvallis, Oregon. 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. Construction Service Corporation admitted that it made false statements to the SBA concerning its eligibility for HUBZone contracts.

Construction Service Corporation also pled guilty to defrauding the U.S. General Services Administration in relation to the Federal Surplus Property Program. As an entity qualified under the SBA’s 8(a) program, Construction Service Corporation was eligible to acquire federal surplus equipment. The defendant corporation admitted to transferring surplus property to an individual who was not eligible to acquire surplus property.

“Construction Service Corporation violated the public trust,” said Olson. “By falsely representing its eligibility for a federal contracting preference, this defendant obtained federal funds that should have gone to a contractor that was actually prioritizing economic development in underserved areas. This case was brought to its successful conclusion through the cooperative investigative work of many federal agencies, all of which well understand the need to protect taxpayers' money.”

“Federal contracts should never be awarded to persons who lie in order to claim eligibility for contracts intended for small businesses,” said Inspector General Peggy E. Gustafson of the Small Business Administration. “Companies who lie in order to claim eligibility for set-aside contracts will be identified and prosecuted for their actions. We would like to thank the U.S. Attorney's Office for its dedicated leadership and professionalism throughout this investigation.”

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; Veterans Administration OIG; the Army Criminal Investigation Command; the Department of Defense Criminal Investigative Service; and the Air Force Office of Special Investigations.