US NRI sentenced to jail for $6 million contract fraud

fraudBusinessman Tarsem Singh has been sentenced to 15 months in prison for fraudulently obtaining contracts worth $6 million from a federal programme created to help minority-owned small businesses.

Singh was sentenced by Washington Federal Judge Reggie Walton, who fined him $25,000 and also ordered him to pay about $120,000 in restitution.

According to the Inspector General Peggy E.Gustafson and the Washington federal prosecutor Channing D.Phillips, Singh set up a shell company to take advantage of the Small Business Development Programme run by the Small Business Administration (SBA), after his original company became ineligible for it and obtained over 25 federal contracts,

Firms owned by minorities, women and ex-servicemen have to meet SBA eligibility standards to get federal contracts, and their workers must perform a certain percentage of the contract work. When the companies grow to a certain size or meet other standards, the program becomes ineligible for federal government contracts issued under the programme

To circumvent these regulations, Singh set up the shell company and made it appear to meet the SBA standards. He took elaborate steps to conceal the fact that his original company was actually carrying out contracts obtained by the fake company.