SBA Suspends CEO for Providing False Information


After suspending Tony Jimenez, founder and chief executive officer of MicroTechnologies, for five months for providing false information to the agency, the Small Business Administration (SBA) will allow him to resume control of the company in May. Jimenez acknowledged that both he and MicroTech, one of the fastest-growing small federal contractors in recent history, made errors in MicroTech’s application for an SBA program.

Initially, both MicroTech and Jimenez were barred from receiving new federal contracts based on information that Jiminez had submitted "false and misleading statements" concerning the firm’s ownership, operations and ties to other companies in an application for the SBA's 8(a) program for small, disadvantaged firms. The SBA later lifted the ban on MicroTech when Jimenez agreed to give up day-to-day control of the firm for at least 30 days.

Exclusion from federal contracts threatened MicroTech's viability; one-third of the over $1 billion in federal contracts MicroTech acquired since its inception in 2004 were secured through the SBA's 8(a) program.

In his agreement with the SBA, Jimenez recognized that MicroTech's 2005 application contained incorrect information about his relationship with two investors and their firm. Earlier comments, however, blamed the errors on a MicroTech consultant hired to advise Jimenez. Accordingly, MicroTech states it has now expanded its Corporate Code of Conduct and Ethics Program to encompass its consultants.  In addition, MicroTech will implement an ethics and compliance program for new employees and consultants and hire an independent third party to evaluate the program.Making false or misleading statements on a federal program application is serious business. Unethical conduct can lead to financial repercussions and severely damage a company's reputation, product quality and employee morale.

Comprehensive compliance training provides guidance to management and staff on unacceptable behavior, offers a roadmap for handling employee conflicts and promotes trust among employees and partners and between the company and the public.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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