A Florida-based heating and cooling business will pay the United States $250,000 to settle a lawsuit alleging it made false claims to the Small Business Administration in order to become a Historically Underutilized Business Zone (HUBZone), the Department of Justice reported Wednesday.
Orlando-based Air Ideal and its majority owner, Kim Amkraut, will also pay 5 percent of the company's gross revenues to the U.S. for the next five years as a part of the settlement.
"HUBZone's were created to stimulate job growth in regions that have historically low business investment," acting Assistant Attorney General Benjamin Mizer of the Justice Department’s Civil Division said. “When companies falsely claim eligibility for government contracts set aside for HUBZone businesses, they not only misuse taxpayer funds, but they also deprive HUBZone communities of the benefits of the program. This settlement shows that there is a stiff price to pay for obtaining government contracts through false statements.”
The lawsuit alleged Air Ideal claimed in 2010 that its principal office was in a HUBZone location. However, the location was a “virtual office” and no company employees worked there, the lawsuit said.
“The HUBZone program is an important tool in the government’s effort to strengthen our economy by encouraging businesses to grow in underutilized and disadvantaged areas,” U.S. Attorney A. Lee Bentley III of the Middle District of Florida said. “We will not tolerate contractors who use deception to undermine its objectives and effectiveness.”