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SALT LAKE CITY — An Arizona business owner found guilty in Utah of making false claims to the government in order to obtain a $99 million contract will serve federal prison time and forfeit over $2 million from multiple bank accounts, district court records show.
Whitney McBride, 41, of Queen Creek, Arizona, was found guilty in June of conspiracy to commit wire fraud, major fraud against the United States, and making false statements to federal law enforcement and to the court.
She was sentenced on Nov. 18 to 30 months in federal prison, followed by 36 months of supervised release, according to court records. She was also ordered to forfeit $2,271,841.16 from seven bank accounts.
Her company, Odyssey International Inc., was fined $5 million, according to court records.
McBride and Odyssey International were initially accused of fraudulently claiming a special status under the Small Business Administration in order to bid on a contract to work at the Fort Drum military base in New York, according to a news release from the Utah U.S. Attorney's Office. Prosecutors described McBride as Odyssey's founder and owner.
A superseding indictment from October accused McBride and the company of carrying out a scheme to obtain contracts through the SBA set aside for businesses in "historically underutilized business zones," or HUB zones. Often the areas that qualify as HUB zones include Native American reservations and areas with a closed military base, the news release says.
In order to qualify for HUB zone contracts, businesses must have at least 35% of employees living in the zones and the contracts must be awarded to small businesses. The HUB zone program is meant to award government defense contracts in the hopes of economically stimulating the underutilized areas, according to the indictment. The program is also meant to "provide contract opportunities to businesses owned by individuals who have personally experienced discrimination," the news release says.
Odyssey and McBride were accused of falsifying information in order to claim the company qualified for government contracts. Much of the criminal conduct took place in Utah, prosecutors say, though Utah business records list the company as being based in Arizona.
Prosecutors say that in 2011, Odyssey placed the bid to work at the New York military base knowing it did not meet the HUB zone standards. The company did not have 35% of employees living in the zone and Odyssey was not a small business, the news release says.
Odyssey had employees falsify addresses on their driver's licenses and voter registrations to show they lived in the designated HUB zone, charging documents say. The company also placed HUB zone residents who did not work for the company on the payroll in order to claim them as employees. Odyssey also used a shell company to pay employees outside of the HUB zone away from the company's records to hide them from the SBA, the news release says.
Charging documents point out individual instances that allowed Odyssey to misrepresent itself, including an instance where an employee's paycheck was split between him and his wife in order to also list her as another HUB zone resident. The company also requested that an employee change their voter registration to a relative's address to give the appearance they lived at the address, the indictment says.
The company was later admitted to the government program and obtained over $200 million in contracts over nine years.
During the trial, the company admitted that its application was fraudulent but placed the blame on the company's former chief financial officer Paul Lee, who had already pleaded guilty to wire fraud. The company's former chief operating officer, Michael Tingey, also pleaded guilty to wire fraud, according to the news release.
The jury ultimately decided to convict McBride and the company on all counts, court records say.