Canton Company And Business Owner Charged With Fraud For Making False Statements To Get Federal Work
A Canton man and the construction company he owns were charged with one count of wire fraud for making false representations about the company’s office location so it could obtain a HUBZone certification and qualify for tens of millions of dollars’ worth of federal contracts, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Charged are William Richardson III, also known as Buster Richardson, and TAB Construction Company, Inc., of which Richardson is the sole owner and shareholder.
The Historically Underutilized Business Zone Act of 1997 (the HUBZone Program), was established to provide federal contracting assistance for qualified small business concerns located in historically underutilized business zones in an effort to increase employment opportunities, investment, and economic development in those areas. Under the HUBZone Program, certain government contracting opportunities were “set aside” to be awarded only to eligible HUBZone Program participants, according to the information.
There were four requirements to participate in the HUBZone Program. First, a firm had to be classified as a small business. Second, the firm had to be controlled and owned at least 51 percent by United States citizens. Third, a firm’s principal office had to be located in a designated HUBZone area. Fourth, at least 35 percent of the firm’s employees had to reside in a designated HUBZone area. Only firms that satisfied all of these requirements were eligible to participate in the HUBZone Program and compete for HUBZone set-aside and/or sole-source contracts, according to the information.
Before a firm could participate in this program and bid on designated government contracts, it had to seek and obtain a certification from the United States Small Business Administration (SBA) verifying that the firm was HUBZone Program eligible. The SBA relied on information that was provided by applicant firms to determine and certify eligibility, according to the information.
In August 2000, to obtain a HUBZone certification, Richardson and TAB submitted to SBA a HUBZone application in which Richardson falsely stated that TAB’s principal office was located at 1010 Walnut Avenue NE in Canton, a location that was within a designated HUBZone area. TAB’s principal office was actually located in another area of Canton that was not within a HUBZone area, specifically 4534 Vliet Street SW, according to the information.
Richardson falsely represented in TAB’s application that the Vliet Street SW location was only a storage area for equipment and was not the company’s principal office location. Richardson and TAB provided supporting information and documents to SBA, including a fake lease, to back up this false claim, according to the information.
Based on Richardson’s false representations, SBA certified that TAB was HUBZone Program eligible and placed TAB on the government’s List of Qualified HUBZone Small Business Concerns, according to the information.
With this designation, Richardson and TAB received more than $34 million in contracts from the U.S. Army Corps of Engineers, the U.S. Coast Guard and the National Park Service between 2005 and 2012, according to the information.
This case is being prosecuted by Assistant U.S. Attorney Rebecca Lutzko following an investigation by the Small Business Administration – Office of Inspector General; Defense Criminal Investigative Service; Department of Homeland Security- Office of Inspector General and the U.S. Army’s Criminal Investigation Division.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.