Becoming a Whistleblower

A person can be compensated for becoming a Whistleblower and exposing those companies that are committing fraud against the U.S. government.

The Small Business Administration (SBA) created the HUBZone program to encourage business development in Historically Underutilized Business Zones. HUBZones are urban and rural areas with low income, high poverty or high levels of unemployment.  In addition, they are regions experiencing a military base closure, a major natural disaster or a catastrophic event that qualifies them for federal disaster aid.

The HUBZone Program was intended to provide legitimate small businesses with a pathway for contracting with the federal government. Unfortunately, it has become a prime target for fraud mostly by larger companies intent on using a legitimate HUBZone business as a pass-through to get access to so-called “set-aside” contracts or subcontracts.

Business HUBZone Qualifications

A business must have the following to qualify for the HUBZone program:

  • Be a small business as determined by the SBA
  • Be at least 51 percent owned and controlled by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization or a Native American tribe
  • Have its principal office located in a HUBZone
  • Have at least 35 percent of its employees living in a HUBZone

The full qualification criteria for the program are available in Title 13 Part 126 Subpart B of the Code of Federal Regulations (CFR). Prospective program participants can also get a preliminary assessment of whether they qualify at the SBA’s Certify website.

Fraudulent Activities

Small businesses unable to meet the needs of a federal contract on their own sometimes need to collaborate with larger companies. This is actually quite common and legal. There are perfectly legitimate ways to engage in such a partnership and the SBA provides extensive guidance on how to do so. Unfortunately, HUBZone businesses are often approached with proposals to commit fraud. Here are a few of the fraudulent activities commonly used:

  • Making false representations about the company’s size, office location or ownership in order to secure a HUBZone certification and qualify for certain set-aside contracts.
  • Serving only as a financial pass-through while performing very little or none of the work actually required under the contract.
  • Obtaining HUBZone certification legitimately, but then moving the primary office outside of the zone or failing to ensure that at least 35 percent of the employees performing the work reside in a HUBZone designated area.

Participating in such a fraudulent scheme can potentially cause a small business to lose its HUBZone certification, face criminal prosecution or be financially liable for damages in civil actions brought by whistleblowers under the Federal False Claims Act.

Our Team

With over 30 years of experience in Qui Tam cases, the attorneys on Baron & Budd’s whistleblower representation team have represented some 70 clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you feel you have the evidence needed in order to pursue a whistleblower lawsuit. Please call [plink phone=”whistleblower” or complete our online case intake form if you would like more information. For more information, see How do I become a government fraud whistleblower?

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