Construction Contractor Convicted of Disadvantage Business Enterprise Fraud
On September 19, 2013, Elaine Martin, of Meridian, Idaho, the former president and majority stockholder of MarCon, Inc., was convicted by a federal jury in Boise, Idaho, of multiple charges, including filing false individual and corporate tax returns, conspiracy, wire fraud, mail fraud, false statements, and obstruction of justice. Martin's co-defendant, Darrell Swigert, of Boise, a minority shareholder in MarCon, was also found guilty.
Martin submitted false and fraudulent applications to have her construction company, MarCon, admitted and/or remain in two different federally funded programs, the U.S. Small Business Administration (SBA) 8(a) Program, and the Department of Transportation Disadvantaged Business Enterprise (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. According to evidence presented at trial, 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.