Transit Safety Management, Inc., was sentenced Thursday to making a false statement to the government in connection with its certification for “favored contracting status.”
The firm’s president, Susan Madigan, pleaded guilty earlier this year to one criminal count of lying to a state agency about the firm’s status as a disadvantaged business enterprise (DBE).
The company was sentenced by U.S. District Court Judge Nathaniel M. Gorton to five years of probation and a fine of $84,000.
In order to qualify for favored status, a company’s management must be controlled by a socially or economically disadvantaged individual such as a woman or minority. The purpose of the program is to give an economic advantage to minorities and women who run their own companies. However, the manager cannot also engage in employment that would prevent him or her from devoting sufficient attention to the affairs of the company.
In this case, investigators discovered that TSM’s purported owner, Madigan, was a full-time employee of a federal agency and the business was really operated by her husband making it ineligible for certification.
Keep reading this article at: http://www.newburyportnews.com/news/local_news/georgetown-firm-found-guilty-in-fraud-case/article_79eeaae0-be38-5753-8b69-3f79e3d31284.html
See earlier report on this case at: http://contractingacademy.gatech.edu/?p=9107