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Narratives: Suspensions and Debarments

Here you can read a narrative about entities and individuals who have been suspended and/or debarred, by SBA's contracting offices, from doing business with the federal government. Entries are listed by year and the type of enforcement action.

2011

Suspensions

  • Case 1 – 3 suspensions

    SBA had evidence that GTSI was performing most if not all the work for its small business prime contractors on the DHS FirstSource IDIQ contract. EGS and Multimax Array where the prime contractors.

    1. GTSI
    2. EG Solutions
    3. Multimax Array
  • Case 2 – 3 Suspensions

    Corners Construction misrepresented its status as an SDVO SBC, and was found ineligible during an SBA SDVO SBC status protest. Rachele Brewer then formed a new company, B&C Facility Services, Inc., and again misrepresented its status as an SDVO SBC (again being found ineligible pursuant to an SBA SDVO SBC status protest). 

    1. B & C FACILITY SERVICES, INC.
    2. Brewer, Rachele K a/k/a Rooney, Rachele K
    3. CORNERS CONSTRUCTION
  • Case 3 – Two Suspensions based on indictments. Individual and firm were indicted based on misrepresentation of HUBZone status. This followed an IG investigation.

    1. CAGS, INC.
    2. Chapman, Kenneth Neal
  • Case 4 – Firm and individual originally suspended based on evidence of creating false passports and citizenship documents for individuals seeking to apply to 8(a) program. The individual has since been indicted.

    1. SYSTEM AND INFORMATION SERVICES CORPORATION
    2. Wang, Guansheng
  • Case 5 –The evidence suggests that there was a scheme by the individuals to use abuse an ANC certified 8(a) firm, KICD. The information was brought to SBA’s attention by the ANC after it was locked out of the offices of KICD (its own subsidiary).

    1. Acri, Anthony
    2. Braum, Walter           
    3. KIC DEVELOPMENT, LLC
    4. VETERANS ENTERPRISE TECHNOLOGY SERVICES LLC
    5. VCI-KICD LLC        
    6. WALTON INVESCO

Debarments

  • Case 1 – HDM charged SCORE for the full amount of fees billed by the Mandarin Oriental Hotel, received full payment from SCORE, but then failed to pay the full fees to the Mandarin Oriental Hotel. HDM’s shortfall to the Mandarin Oriental Hotel is approximately $173,000. HDM’s receipt of full payment from SCORE and subsequent failure to pay the Mandarin Oriental Hotel constitute a knowing misuse of contract funds.

    1. H D MANAGEMENT LLC
    2. Dacey, Daniel
  • Case 2 – Firms and individuals were involved in a scheme to misrepresent Platinum Once status for both the HUBZone and 8(a) programs. All parties settled civil claims with the DOJ, and were subsequently debarred by SBA.

    1. Platinum One, Inc.
    2. Capitol Contractors, Inc.
    3. Smith, Vernon J. 
    4. Smith, Vernon M.
    5. Wright, Anthony L.

2012

Suspensions

  • Case 1 – Three firms and two individuals associated with them were suspended for submitting false documents to gain a contract, misrepresentation of HUBZone and SDVO SBC status, and submitting false documents and statements to SBA with regard to their respective HUBZone and SDVO SBC status. An affiliated 8(a) firm was suspended along with its principal for his actions with regard to the false statements and misrepresentations made by MedTrends.

    1. MedTrends – [Former HUBZone and SDVO SBC]
    2. Jenesis, Inc. [8(A)]
    3. JensisA1
    4. Kervin Spivey
    5. Roger Malik
  • Case 2 – Firm and individual suspended based on indictment for misrepresentation of SDVO SBC status.

    1. B&J Multi Service Corporation
    2. Tyron Jones

Debarments

  • Case 1 – Two debarments based on guilty pleas. Individual and firm were indicted based on misrepresentation of HUBZone status. This followed an IG investigation.

    1. CAGS, INC.
    2. Chapman, Kenneth Neal
  • Case 2 – Firm and individual originally suspended based on evidence of creating false passports and citizenship documents for individuals seeking to apply to 8(a) program. The individual has since been indicted.

    1. SYSTEM AND INFORMATION SERVICES CORPORATION
    2. Wang, Guansheng

2013

Suspensions

  •       Contracting

    • Suspension of Pius Bola Akinola a/k/a Bola Akinola and M3L Corporation
      SBA suspended Pius Bola Akinola a/k/a Bola Akinola and M3L Corporation, on October 11, 2012, based on adequate evidence that Mr. Akinola and M3L made false statements in its application for SBA’s 8(a) Business Development program, and failed to perform contracts in accordance with SBA regulations. SBA’s evidence showed the M3L performed little to no work on the 8(a) BD contracts that it had been awarded. Mr. Akinola and M3L also presented false evidence to SBA with regard to Mr. Akinola’s employment history and status. There was also evidence that M3L and another firm had merged, that SBA was not notified of the change in ownership as required, and that in response SBA’s inquires Mr. Akinola and M3L provided false or misleading information to SBA.

    • Suspension of Joseph Terry and Government Technical Services, LLC
      On January 18, 2013, SBA suspended Joseph Terry (Mr. Terry) and Government Technical Services, LLC (GTS) based on their violation of FAR Section 9.407-2(a)(1),(3), and (9), and FAR section 9.407-2(b). Mr. Terry owned and controlled GTS from 2003-2012, and used his status as a socially and economically disadvantaged individual to qualify GTS to be certified as an 8(a) BD program participant. GTS entered the 8(a) BD program on July 28, 2003, and exited the program on July 28, 2012. On October 30, 2012, Mr. Terry was charged with 5 counts of wire fraud under 18 U.S.C. section 1343 by an indicted handed down and filed in the U.S. District Court for the Northeastern District of Alabama. The indictment alleges, among other things, that Mr. Terry conspired to submit or cause the submission of false information to obtain 8(a) BD contracts that GTS was not entitled to receive. The indictment alleges that Mr. Terry made false representations to SBA in GTS’s 8(a) BD program application and in subsequent submissions. Specifically, it was alleged that Mr. Terry submitted false and unfiled ITS tax forms and tax statements. The indictment also alleges that Mr. Terry was complicit in submitted false information in loan applications to several banks. GTS bid on and received several 8(a) BD set-aside contracts with the Federal Government. The indictment services as adequate evidence that Mr. Terry and GTS should be suspended for violations of FAR section 9.407-2(a)(1), (3), and (9), and FAR section 9.407-2(b).

    • Suspension of Brian Bauman
      On October 18, 2012, SBA suspended Brian Bauman (Mr. Bauman) based on his violation of FAR section 9.407-2(a)(1), (3), (9), and FAR section 9.407-2(b). Mr. Bauman is President of B&J Multi Service Corporation (B&J). SBA received adequate evidence that Mr. Bauman allegedly misrepresented B&J’s eligibility to obtain certification as an 8(a) BD program participant and allegedly misrepresented B&J’s status as a service-disabled veteran-owned (SDVO) small business concern (SBC) in order to receive contracts set aside for qualified 8(a) BD and SDVO SBC participants. On August 30, 2012, Mr. Bauman was charged with criminal conspiracy in an Information filed with the U.S. District Court for the District of Massachusetts. The Information alleges that Mr. Bauman and others conspired to submit or cause the submission of false information to obtain 8(a) BD and SDVO SBC contracts that B&J was not entitled to receive. The Information serves as adequate evidence that Mr. Bauman has violated FAR section 9.407-2(a)(1), (3), and (9), and FAR section 9.407-2(b).

  •       Lending (Immediate Suspensions)

    • Texas man allegedly provided fraudulent bank records to the lender in connection with an SBA guaranteed loan. He is under indictment for violation of 18 USC § 1343, 2, and 1349.

Proposed Debarments (Contracting Only)

  • Proposed Debarments of Avue Technologies, AMSAQ, Inc., and Sophie Lee
    SBA proposed Avue Technologies, AMSAQ, Inc., and Sophie Lee for debarment on February 1, 2013. AMSAQ, Inc. is a participant in SBA’s 8(a) Business Development Program, and Sophie Lee is AMSAQ’s owner and President. AMSAQ was a awarded an 8(a) BD sole source service contract. SBA had information showing that the all or nearly all of the work was being performed by AMSAQ’s subcontractor Avue Technologies.

  • Proposed Debarments of Blue Steel, Inc. and Andrew AdamsonSBA proposed Blue Steel, Inc. and its principal, Andrew Adamson, for debarment on January 22, 2013. Blue Steel was notified via letter dated November 13, 2012, that the firm was being considered for debarment based upon information derived from SBA’s 8(a) Business Development (BD) Program Office which indicated that Blue Steel had misused surplus property acquired through the 8(a) BD Program. SBA’s 8(a) BD Program Office was notified by the California Department of General Services (DGS) that a DGS compliance check of Blue Steel revealed equipment missing from the address of record. Based on this information, SBA conducted a subsequent investigation to verify the firm’s compliance with the regulations governing use of surplus property set forth in 13 C.F.R. § 124.406. In the course of this investigation, Andrew Adamson and Blue Steel repeatedly failed to comply with SBA requests for information and documentation. Based on this failure to cooperate, SBA’s Suspension and Debarment Official determined that Andrew Adamson and Blue Steel do not possess present responsibility as a contractor. As such, both parties were proposed for debarment.

  • Proposed debarments of Keith Hedman, Dawn Hamilton, David George Lux, Joseph Richards, David Sanborn, Security Assistance Corporation (SAC), and Psi Protect, Inc. f/n/a Protection Strategies, Inc. (Psi) d/b/a Eagle Technologies a/n/a ETI Security, Inc. These individuals have pleaded guilty to engaging to a multi-year scheme to defraud the Government by abusing SBA’s contracting programs. SAC is a front company run by the owners and officers of Psi. The evidence demonstrated a long term pattern of consistently submitting false statements and records to SBA in order maintain 8(a) and small business status. The individuals and firms submitted false documents and statements during the application process, during the multiple eligibility reviews (several times the eligibly of the firm was questioned by SBA, and the firm responded by providing SBA with falsified documents, and false statements).

    1. David Hamilton
    2. Keith Hedman
    3. David George Lux
    4. Joseph Richards
    5. David Sanborn
    6. Security Assistance Corporation (SAC)
    7. PSI Protect, Inc.
    8. Protection Strategies, Inc.

 

Debarments

  •       Contracting

    • None at this time.

  •       Lending

    • Toris Young was convicted for mail fraud and theft of government funds for converting $963,900 in disaster loan proceeds for personal use. Mr. Young obtained the loan to reconstruct a church damaged by Hurricane Katrina, where he served as pastor. Mr. Young was sentenced to 120 months in prison, 3 years supervised release and restitution of $963,900 to SBA.

    • David Stuck pleaded guilty to one count of false statements to a financial institution in violation of Indiana state law, for knowingly and willfully stating that he had not been previously charged, arrested or convicted of a crime, other than a minor vehicle violation, on an SBA Express Borrower information Form, when in fact, Mr. Stuck had four previous felony convictions.

    • Jeffrey Kraai made actionable admissions in a criminal plea agreement related to a 7a loan. Specifically, Mr. Kraai admitted to: 1) misrepresenting the true purchase price; 2) misrepresenting the length of a continuing services agreement, and 3) knowingly and willfully hiding information from SBA and the bank with the knowledge that SBA or the bank would deny the loan if the true information were presented.

    • Jeffrey Bivens is an attorney and his debarment is based on him knowingly and willfully making a series of false representations to Wachovia Bank in connection with his serving as counsel to a SBA loan applicant. The $2 million SBA loan defaulted early.

    • James Downward (President of D&D) pleaded guilty to money laundering and signed a Statement by Defendant in Advance of Guilty Plea that identified a scheme using straw buyers to procure SBA guaranteed loans.

    • Huey-Nan Steve Lin pleaded guilty to money laundering and signed a Statement by Defendant in Advance of Guilty Plea that identified a scheme by using straw buyers to procure SBA guaranteed loans.

    • Suleiman Mohammad pleaded guilty to one count of Financial Institution Fraud, in violation of Illinois state law, for obtaining and submitting false financial statements to secure an SBA loan to finance the sale of Citgo station co-owned by Mr. Mohammad.

    • James Kim plead guilty and was convicted of violating 18 USC § 1014 for false statements regarding indebtedness and pending lawsuits. He made false statement on applications for SBA guaranteed loans.

    • Seung Oh plead guilty to conspiracy to commit bank fraud and money laundering in violation of 18 USC § 1049 and 18 USC § 1956(a)(1)(b)(i).Seung Oh agreed to use the resources of her settlement company, Washington Settlement Group, and her law firm, Seung E. Oh and Associates, LLC to facilitate loan closing for deals that would otherwise fail to meet the lending parameters of banks authorized to lend under SBA’s Section 7(a) program.

    • Thomas Lee Kemerer plead guilty and was convicted of violating 18 USC § 1343 for committing wire fraud. The wire fraud at issue involved an SBA guaranteed loan.

    • Jennifer Daw plead guilty and was convicted of violating 18 USC § 1014 for making false statements. Daw falsely represented her grandmother as the source of an equity injection gift of an SBA guaranteed loan when, in fact, the seller provided the funds.

    • James Conde plead guilty and was convicted of violating 18 USC § 1343 for committing wire fraud. The wire fraud at issue involved an SBA guaranteed loan.

2014

Suspensions

  •       Contracting

    • None at this time.

  •       Lending (Immediate Suspensions)

    • None at this time.

Proposed Debarments (Contracting Only)

  • None at this time.

 

Debarments

  •       Contracting

    • Aybub Mohmed Badat owned and operated Badat Hospitality. Mr. Badat pleaded guilty and was convicted of violating 18 U.S.C. § 1001 for false statements related to an SBA Guaranteed Loan. Mr. Badat falsely certified a transaction was arms-length when, in fact, the transaction was part of a property flip. Mr. Badat was debarred for a period of 3 years.

    • Joon Park (a/k/a Joon Pak, a/k/a Joon Paik) owned and operated Jade Capital & Investments LLC, a company that brokered loans for small businesses, among other services. Mr. Park knowingly falsified, or directed the falsification of, the financial information of Jade Capital's clients, including bank statements, on applications for SBA guaranteed loans from multiple lenders. Furthermore, he and others under his direction prepared false tax returns for Jade Capital clients. These falsified tax returns showed inflated income in order to increase the likelihood that a loan would be approved. Mr. Park pleaded guilty and was convicted of violating 18 U.S.C. §1349 (Conspiracy to Commit Bank Fraud). Mr. Park was debarred for a period of 18 years.

  •       Lending

    • Mark McWilliams was convicted for conspiracy to commit loan fraud. According to his plea agreement, Mr. McWilliams created falsified bank documents to hide the true source of funds used to qualify another individual for an SBA loan application. Mr. McWilliams was the seller in an SBA-guaranteed loan transaction. Mr. McWilliams was debarred for a period of 3 years.