The Anatomy of an MWBE Fraud Scheme Investigation

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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.  

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

MWBE Fraud Schemes: What is a Trucking Scheme?

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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.

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

MWBE Fraud Schemes: What is a Front?

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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”.

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

ICAP: Compliance Requirements

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The Industrial and Commercial Abatement Program (ICAP) provides a reduction of property taxes for construction, alterations, or improvements on qualifying industrial or commercial properties. This reduction is only in specific areas of New York City and for varying periods of time.

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Topics: New York Contractor, MWBE, Compliance, ICAP

MWBE Fraud Schemes: What is a Supply Scheme?

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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.

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

MWBE Fraud Schemes: What is a Pass Through?

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One of our recent posts, “What Does MWBE Fraud Look Like?” introduced the concept of common fraudulent “schemes” that can occur regarding goal requirements for certified XBE’s (Minority, Women, and Disadvantaged Businesses) on projects with diversity goals. Let’s examine these unlawful courses of action more closely, including highlighting the cost to companies for non-compliance. The first scheme we look at is pass through.

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Topics: Diversity Outreach, MWBE

What Does MWBE Fraud Look Like?

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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.

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

What Does Commercially Useful Function Mean (CUF)?

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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.

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Topics: Commercially Useful Function (CUF), MWBE

What is a Women-Owned Business Enterprise (WBE)?

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Almost 20% of all firms are owned by women according to the 2018 Census. That number has been increasing over the years, especially in construction.

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Topics: Diversity Outreach, MWBE

What Is a Minority Business Enterprise (MBE)?

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Many construction projects have both State & Federal Diversity participation goals that Owners, General Contractors, and even Prime Contractors are trying to achieve. These goals often require that a certain percentage of the Project’s contract value is awarded to certified MBE firms.

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Topics: Diversity Outreach, MWBE