By Kim Slowey | August 8, 2016
- South Carolina federal prosecutors have indicted a group of seven construction executives and associates for allegedly setting up and operating a network of sham disadvantaged and minority businesses in order to win approximately $350 million in government contracts in and out of the state since 2002, according to The State.
- In addition to creating their own shell companies, authorities alleged that the group also enlisted existing companies owned by women, minorities, veterans and disabled veterans to assist in perpetrating their fraud.
- If convicted, the individuals and two companies – financing firm Automatic Cash and construction consultant EEC – face sentences ranging from five to 20 years in prison, as well as fines of $250,000 to $10 million.
Most publicly funded projects, particularly high-dollar ones, include some level of minority participation requirements, and because many owners and general contractors maintain there is a shortage of qualified minority contractors, some firms see this as an opportunity to gain entry into a potentially lucrative niche, even if they’re not legally entitled.