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SBA Reaches Record Settlement in Procurement Fraud Case

May 10, 2022

The United States Attorney’s Office for the Eastern District of Washington announced a record settlement in a Small Business Association or SBA procurement fraud case.  TriMark USA, LLC agreed to pay $48.5 million to settle a False Claims Act case filed in 2019.  The settlement involved fraud against the SBA because TriMark fraudulently applied for and was awarded service-disabled veteran set-aside contacts.  According to the DOJ’s press release, TriMark, USA, LLC and its subsidiaries, TriMark Gill Marketing and TriMark Gill Group, Inc., will collectively pay a record $48.5 million to resolve the procurement fraud case.   A former TriMark executive, Kimberley Rimsza, also agreed to pay $100,000 as a civil penalty for her part in the scheme.  The settlement is the largest ever False Claims Act recovery relating to small business procurement fraud.

TriMark and Its Subsidiaries Admit to SBA Fraud

TriMark, USA, LLC, based in Massachusetts, provides kitchen and food service equipment to government customers.  In addition, it is a large company as defined by the SBA.  Therefore, it is not eligible to bid for federal set-aside contracts for small businesses. To circumvent the rules, TriMark used its subsidiaries as pass-throughs during the bidding process.  As a result, it acquired through fraud contracts that SBA set aside for small businesses. TriMark also admitted its conduct caused federal agencies to award set-aside contracts to its subsidiaries. TriMark’s conduct violated the federal regulations designed to encourage awarding government contracts to legitimate small businesses.

This case demonstrates a shocking disregard for fair competition, small business rules, and integrity in government contracting.  We insisted that both TriMark and former company executive Kimberley Rimsza admit and accept responsibility for their conduct . . .

-Vanessa R. Waldref, United States Attorney for the Eastern District of Washington

Legitimate Small Business Owners Benefit from SBA Set-Aside Procurement Contracts

Every federal government purchase between $10,000 and $250,000 is automatically set-aside for small businesses as defined by the SBA. If at least two companies can provide the product or service. The following are the four categories of small business set-aside contracts:

Service-Disabled, Veteran-Owned Small-Business. Small businesses owned, controlled, and operated by veterans of the United States military who incurred a service-connected disability are eligible for these contracts.

Women-Owned Small Business. These contracts are available to small businesses that are majority owned, operated, and controlled by a woman who is a U.S. Citizen.

Small Disadvantaged Businesses and 8(a) Small Businesses. In order to qualify, the 51% owner and operator must be a U.S. citizen who is economically and socially disadvantaged as defined by the SBA.

Historically Underutilized Business Zones (HUBZone) Small Business. Contracts in this category are awarded to small businesses that are: 1) owned, controlled, and primarily managed by U.S. citizens, a Community Development Corporation, an agricultural cooperative, a Native Hawaiian organization, or an Indian tribe; 2) have its principal office located in a HUBZone; and 3) have at least 35% of its employees live in a HUBZone.

How to Report Procurement Fraud

The abuse of federal set-aside programs is just one type of government procurement fraud.  If you have evidence that a company is fraudulently acquiring federal set-aside contracts, contact us for a free and confidential consultation.

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