Minority and Women Owned Businesses (MWBE) Manhattan District Attorney’s Report Reveals Systematic Fraud by Contractors Using MWBE Firms

Minority and Women Owned Businesses (MWBE) 

Manhattan District Attorney’s Report Reveals Systematic Fraud by Contractors Using MWBE Firms

Contractors engaging in fraudulent business practices concerning the use of minority and women owned businesses (MWBE) are nothing new in the construction industry.  New York City estimates that there have been over 30 arrests and over $110 million in fines and forfeitures handed out over the past 10 years to firms violating MWBE requirements.   Recently, a grand jury impaneled by the Manhattan DA’s found extensive and systematic fraud and abuse among contractors working with, or purporting to have worked with MWBE firms.  The DA’s grand jury report revealed that numerous prime contractors and subcontractors engaged in work in New York City have engaged in fraudulent practices.  These practices include using MWBEs to perform work or supply materials, but in fact used non-MWBE firms and created fraudulent invoices and billing records to make it appear as though the work and payments flowed to MWBEs.  In reality, the money merely passed through those businesses to the non-MWBEs that performed the work.

To curb fraud and abuse the Manhattan DA has recommended increased enforcement and prosecution efforts, closer oversight of MWBE programs, as well as stiffer criminal penalties.  In addition, the DA has recommended more extensive certifications from contractors hiring MWBEs and MWBE firms to expose “pass through” relationships.

Compliance with MWBE requirements can be difficult even for the most experienced contractors, and infractions that are seemingly innocent can result in stiff fines and even criminal charges.

George Sitaras Esq.

The attorneys at Marco & Sitaras, PLLC provide legal counsel to MWBE firms, as well as defend contractors that are accused of violating MWBE requirements.  If your firm requires counsel with respect to MWBE matters you should contact us today.

Marco & Sitaras, PLLC
33 Whitehall Street, 16th Floor, New York, NY 10004
phone: 212-430-6410 (ex 190)
E-Mail: info@gmgslaw.com