The Anatomy of an MWBE Fraud Scheme Investigation

Image credit: YokPiyapong042/shutterstock.com

Over the last few weeks, our posts have discussed different types of fraud schemes that might occur in relation to goal requirements for certified Minority, Women, and Disadvantaged Businesses (MWBE or MWDBE) on projects with diversity goals. We also cited cases associated with those schemes that resulted in fines, imprisonment, and/or monitorships. In each case, an investigation produced and analyzed the evidence that resulted in successful indictments and the resulting penalties.  

Read More

Topics: Diversity Outreach, Commercially Useful Function (CUF), MWBE

MWBE Fraud Schemes: What is a Trucking Scheme?

Image credit: Rob Wilson/shutterstock.com

As a business owner bidding on projects with diversity requirements, there is more to concern yourself with than simply submitting a competitive bid. You need to be aware of the various Minority, Women, and Disadvantaged Businesses (MWDBE) goal requirement schemes, so you do not unwittingly get caught in something deceptive and illegal. We have been writing about these schemes recently, including pass- throughs and fronts. This post will examine what is known as a Trucking Scheme.

Read More

Topics: Diversity Outreach, Commercially Useful Function (CUF), MWBE

MWBE Fraud Schemes: What is a Front?

Image credit: gorodenkoff/shutterstock.com

Fraudulent schemes have become increasingly commonplace in relation to goal requirements for certified MWBE’s (Minority, Women, and Disadvantaged Businesses) on projects with diversity goals. In previous blogs, we have discussed pass through and supply schemes. This week we will examine a scheme known as a “Front”.

Read More

Topics: Diversity Outreach, Commercially Useful Function (CUF), MWBE

MWBE Fraud Schemes: What is a Supply Scheme?

Image credit: F8 Studio/shutterstock.com

Have you heard of a supply scheme? If we revisit one of our past posts, “What Does MWBE Fraud Look Like?”, it introduces supply schemes along with other common fraudulent “schemes” that might occur in relation to goal requirements for certified MWBE’s (Minority, Women, and Disadvantaged Businesses) on projects with diversity goals. This post will examine supply schemes in more detail.

Read More

Topics: Diversity Outreach, Commercially Useful Function (CUF), MWBE

What Does MWBE Fraud Look Like?

Image credit: gorodenkoff/Shutterstock

On projects with diversity goals, regulations require that certified firms provide meaningful participation, in other words, they must provide a Commercially Useful Function on their projects. When Contractors execute agreements that include diversity goals, they are committing to utilizing certified firms in a manner consistent with the regulations.

Read More

Topics: Diversity Outreach, Commercially Useful Function (CUF), MWBE

What Does Commercially Useful Function Mean (CUF)?

Image credit: N+U+S+A+R+A/shutterstock.com

In order to receive credit for your project's compliance requirements by hiring Disadvantaged Business Enterprises (DBEs), you must showcase that the DBEs are performing a commercially useful function. In the past, some Contractors would hire DBEs to fulfill their diversity requirements but did not have them actually perform the work. DBEs would sub out their work to another firm (typically not a DBE) that would fulfill all of the work instead. To prevent this from happening, Federal, State, and local regulations were put in place that in order to receive credit, hired DBEs must provide a commercially useful function.

Read More

Topics: Commercially Useful Function (CUF), MWBE