Former Idaho Construction Company Co-Owner Sentenced for Obstruction and Conspiracy
On March 19, 2014, in U.S. District Court, Boise, Idaho, Darrell Swigert, former co-owner of MarCon, Incorporated, a highway construction company that specialized in guardrail installation, was sentenced to three months in prison, two years of supervised release, ordered to pay a $5,000 fine and perform 100 hours of community service for his role in a U.S. Department of Transportation (DOT), Disadvantaged Business Enterprise (DBE) Program/U.S. Small Business Administration (SBA) 8(a) Program fraud scheme.
Swigert and his co-defendant, Elaine Martin, defrauded the DOT DBE program, which resulted in MarCon Incorporated being awarded more than $15 million in government contracts based on the company's fraudulently obtained DBE status, and more than $2.5 million in government contracts based on the company's fraudulently obtained SBA 8(a) status. Martin was sentenced in February 2014.
Swigert assisted Martin in submitting false and fraudulent applications to have her construction company, MarCon, admitted and/or remain in two different federally funded programs, the SBA 8(a) Program, and the Department of Transportation DBE Program. Both programs are designed to help economically and socially disadvantaged businesses compete in the marketplace. To be admitted into the programs, the owner/shareholder that qualifies as socially disadvantaged must also demonstrate economic disadvantage, in part by having a personal net worth below a certain statutory cap. Our investigation disclosed that Martin took steps to artificially lower her personal net worth, such as acquiring, holding and transferring assets into the names of nominees in order to appear to be economically disadvantaged. This allowed Martin's construction firm, MarCon, to qualify for the DBE and SBA 8(a) programs.
We conducted this investigation jointly with the SBA-OIG, IRS-CID, and the FBI.