Veteran-owned small businesses have long faced inconsistencies between the regulations of the Small Business Administration (SBA) and those of the Department of Veterans Affairs (VA). For example, these inconsistencies can lead to companies qualifying as a Service-Disabled Veteran-Owned Small Business (SDVOSB) under VA standards yet but not SBA standards—or vice versa. This issue came to a head recently at the U.S. Court of Federal Claims (COFC) in Veterans Contracting Group, Inc. v. United States.

In a decision issued on December 15 and made public on December 21, the COFC restored a company’s ability to pursue contracts set aside for small businesses owned by disabled veterans by the VA. The decision came a day after the COFC reluctantly backed the SBA’s determination that the same company did not qualify for set-aside contracts under its rules. These conflicting decisions show the struggle the COFC and contractors face when dealing with inconsistent small business rules from two agencies.  

Continue Reading COFC Decision Foreshadows VA Proposed Rule on Service-Disabled Veteran-Owned Small Business Eligibility Rules

  • MoneyGram and Ant Financial mutually terminate $1.2 billion proposed merger
  • CFIUS’s concerns focused on cyber and information security
  • Scrutiny of buyers’ information security processes is likely to increase

By Thad McBride and Todd Overman with help from law clerk Nicole Giles

On January 2, 2018, U.S.-based MoneyGram International announced that its proposed acquisition by Ant Financial, a Chinese company owned by Alibaba, was being blocked by the U.S. Committee on Foreign Investment in the United States (CFIUS).  CFIUS is the U.S. government’s inter-agency committee tasked with reviewing foreign entities’ purchases of and investments in U.S. companies when the transaction could pose a threat to U.S. national security.

Continue Reading CFIUS Continues Focus on Information Security, Blocks Chinese Acquisition of MoneyGram

The U.S. Court of Federal Claims recently issued a 2017 statistical report—covering the government’s fiscal year October 1, 2016 to September 30, 2017. During this time, 652 suits filed were filed at the Court and 1,035 suits disposed of within the 12 month period. Of the suits filed, over 42% were contract dispute or protest related, almost 15% taking cases, and 8% tax related. With the overall disposal rate of cases increasing by 82% over the previous year, the Court had its most productive year out the past 12 years. Plaintiffs seeking relief at the Court received around $1.3 billion in judgments and settlements—a nearly $500 million increase from 2016 and the largest amount since 2007. The government, on the other hand, was awarded only $4.3 million in counterclaims, sanctions or offsets.

Continue Reading U.S. Court of Federal Claims Reports on Busy and Productive FY17

  • Many medical products can be exported to Iran – so long as a license is obtained
  • Imposition of successor liability underscores importance of pre-transaction due diligence
  • OFAC enforcement, as in the past, continues to take a long time

In December 2017, the U.S. Office of Foreign Assets Control (OFAC) announced a penalty of $1.2 million against DENTSPLY SIRONA Inc. (DSI), one of the world’s largest manufacturers of dental products, for violating U.S. sanctions on Iran.  DSI, which is publicly traded in the United States, is based in York, Pennsylvania, and maintains operations around the world.

Continue Reading U.S. Dental Supply Company Penalized for Violating Iran Sanctions

I am presenting a Clear Law Institute (CLI) webinar titled, “Hot Topics in U.S. Sanctions.” The United States continues to use economic sanctions and embargoes to limit trade with countries, entities, and individuals that are deemed to pose a threat to U.S. national security. Yet the sanctions maintained by the U.S. government can change quickly.

In this webinar, you will learn more about the current landscape, including possible business opportunities that are available in countries subject to U.S. sanctions. In particular, you will learn about:

  • The Primary U.S. sanctions laws and regulations
  • Penalties and recent sanctions enforcement action
  • Key compliance challenges, such as Specially Designated Nationals, facilitation and the export of services, and the fluidity of current sanctions on Cuba, Iran, Russia and Venezuela
  • Compliance best practices to prevent and detect violations

The webinar will be held on Tuesday, December 12 from 1:00 p.m. – 2:15 p.m. EST. This webinar has been approved for 1.25 hours of general Tennessee CLE credit. For more information and registration, visit the CLI website.

*Receive a 35% discount by using the promo code: thmc35

The Government recently indicted an Army veteran for allegedly using his status as a service-disabled veteran to help a company qualify as a service-disabled veteran-owned small business and falsely obtain nearly $40 million in healthcare facility construction task orders from the Department of Defense.

The indictment is an indication that the government is continuing to aggressively pursue small businesses that fail to comply with set-aside requirements, and is a reminder that businesses benefiting from small business programs must be fully compliant with the complex regulations governing those socio-economic programs. It is also a reminder that the consequences of failing to meet those requirements are real – the Army veteran, Joseph Dial Jr., is facing over a century in prison.

Continue Reading If You Don’t Do the Work, You Might Do Time Instead: Service-Disabled Veteran Faces Jail Time for Failing to Run Day-to-Day Operations

Post at a glance:

  • FinCEN imposes $8 million penalty against California’s biggest and oldest card club
  • Club failed to implement and maintain an effective anti-money laundering (AML) program and failed to detect, deter, and report suspicious transactions
  • Enforcement action serves as valuable reminder of scope of Bank Secrecy Act (BSA)

As mentioned in our prior AML Update, the U.S. Financial Crimes Enforcement Network (FinCEN) continues to aggressively enforce anti-money laundering and other financial crimes laws.

The latest target? California’s biggest and oldest card club, Artichoke Joe’s.

Continue Reading Anti-Money Laundering Update: California Card Club Clubbed by FinCEN for AML Violations

Congress recently concluded the conference on the 2018 National Defense Authorization Act (NDAA), resolving the differences between the House and Senate versions of the FY18 NDAA passed earlier this year.

Pilot Program Will Require Contractors to Reimburse the Department of Defense for Protest Processing Costs

Among other significant procurement provisions in the bill that came out of conference, Section 827 of the 2018 NDAA includes a three-year pilot program that will require that large Department of Defense (DoD) contractors – those with revenue in excess of $250 million during the previous year in FY17 constant dollars – reimburse DoD for “costs incurred in processing covered protests” if a protest is “denied in an opinion” issued by the Government Accountability Office (GAO).  This provision, which is similar to legislation proposed by the Senate last year, reflects Congress’ belief that contractors are taking advantage of the GAO protest system by filing frivolous protests that are delaying properly awarded contracts and imposing unnecessary costs on DoD.  As it appears now, the provision will take effect two years after the bill is signed.

Continue Reading Large Contractors – Time to Take Your Protests to Court?

In a November 10 article published by PaymentsCompliance, I commented on expanded sanctions the United States has imposed against North Korea. These newest sanctions prohibit access to the U.S. financial system for certain entities found to be aiding North Korea. In the article I note that, “the recent U.S. sanctions actions related to North Korea seem to target non-North Korean actors that are operating in the country — especially Chinese entities and individuals, though also several Russian actors. The U.S. government seems to be applying pressure to countries and entities that continue to trade with North Korea, and making it harder for those countries or entities to do business with U.S. and European financial institutions.”

The full article, “Firms Under Pressure as U.S. Extends North Korea Sanctions,” was published by PaymentsCompliance on November 10, 2017, and is available online.

This Post at a Glance:

  • FinCEN imposes $2 million penalty against community bank
  • Bank failed to conduct appropriate due diligence related to Mexican customer
  • Small banks, other financial institutions need to recognize obligations under Bank Secrecy Act

On October 27, 2017, the U.S. Financial Crimes Enforcement Network (FinCEN) announced a $2 million fine against Lone Star National Bank, an independent community bank in Texas, for “willfully violating” anti-money laundering (AML) requirements of the Bank Secrecy Act (BSA).  FinCEN, which is part of the U.S. Treasury Department, has a primary role in safeguarding the U.S. financial system against money laundering and other illicit uses.

Continue Reading Anti-Money Laundering Update: FinCEN Makes Small Texas Bank Pay Big Fine for Violating Bank Secrecy Act