Ohio-based Testech, Inc. and its owner, CESO, Inc., paid nearly $2.9 million to settle allegations that they falsely claimed disadvantaged business status on several government-funded transportation projects in order to garner construction work. The U.S. Department of Transportation’s Disadvantaged Business Enterprise (DBE) Program requires state and local agencies receiving federal funds for contruction projects to set goals for disadvantaged business participation. At least 10% of federal funds on such projects must go to DBEs. DBEs are small businesses that are owned and controlled by socially and economically disadvantaged individuals. Small businesses that are minority or woman-owned are presumed to be socially and economically disadvantaged.
In the lawsuit involving Testech and CESO, it was alleged that disadvantaged status was claimed for Testech by falsely representing that the company was owned by a socially and economically disadvantaged individual when, in fact, the company was owned and controlled by CESO. The suit was initiated by a whistleblower, a former employee of Testech. His share of the recovery is over $500,000.
If you believe you have a DBE fraud claim or a Small Business Administration (SBA) fraud claim, please contact the Rabon Law Firm.