Retired Army Officer Defrauded U.S. Gov't, 5th Circuit Says
It's a disgraceful ending after years in the service, but the Fifth Circuit Court of Appeals refused to disturb a lower court's criminal conviction of a retired U.S. Army Colonel who was earlier found by a jury to have knowingly defrauded the US government.
Sixteen counts of wire fraud will be difficult to overcome, no doubt.
Small Business Administration
Thomas Gregory Harris is a retired U.S. Army colonel and was the Sr. Vice President of Luster National, Inc., a building and contracting company. Sometime before 2010, he met with friends to discuss the possibility of either forming a joint venture or going into business with each other. The other side already had a business, Tropical Contracting, LLC. Tropical's members were reticent to move forward because their business was small by comparison and Harris's proposals implicated much spending.
Harris induced his would-be business partners to form the Tropical Luster Joint Venture (TLJV) which was later approved by the Small Business Administration. His goal, the circuit said, was to use Tropical's earlier approval as a section 8(a) concern under the act that formed the SBA, in order to bilk the federal money illicitly. Under Section 8(a), the purpose is to promote the business development of companies owned and operated by "socially and economically disadvantaged individuals." Promotion typically is in the form of set-aside government contracts.
A Scheme All Along?
When TLJV was approved for a huge government contract, Luster's personnel completed all the work. Tropical didn't lift a finger. More important, Luster was not an 8(a) approved entity.
Thus, in order to get approval from the SBA, a number of false statements had to be sent to the SBA electronically (thereby supporting wire fraud charges). To keep himself insulated, Harris had the members of Tropical push the send button, so to speak. But the circuit wasn't fooled.
Highly Deferential Review
The circuit court would not overturn the lower court's decision based on the finding that a reasonable jury could find that Harris was completely aware that he was attempting to defraud the U.S. Government. So, although the circuit vacated his sentence, it affirmed the lower court's finding of criminal liability.
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