Why would a contractor create a contract for illegal work? I really don’t know.
Late last year, the FBI announced that a Maryland contractor, Forrester Construction Company, agreed to pay $2.15 million dollars to resolve a criminal investigation into alleged fraud in connection with the use of disadvantaged business enterprises involving more than $145 million of District of Columbia government contracts.
Under this scheme, Forrester entered into joint venture agreements with a minority owned businesses under which the minority owned business acted as a 51% owner and was entitled to 51% of the profit. After the project was awarded to the joint venture, Forrester and the minority owned business entered into side agreements that allowed Forrester to take control of the project and gave Forrester a greater portion of the profits.
I wonder why Forrester and the minority owned business exchanged agreements about the change in control and entitlement to profit. Was it really necessary to document their illegal deal? Did either party to the agreements think that these documents could be used to enforce their illegal side deal?
I also find it interesting that the plea agreement requires Forrester to implement internal reforms to prevent this type of situation from happening again. So, it appears that Forrester is not debarred from District of Columbia work, but must instead make sure it doesn’t commit fraud on government contracts again.