Source: United States Attorneys General 12
SALT LAKE CITY – On June 1, 2022, a federal jury found both Odyssey International, Inc. and its president and owner, Whitney McBride, 41, of Queen Creek, Arizona, guilty of conspiracy to commit wire fraud, wire fraud, and major fraud after a trial in Salt Lake City on June 1, 2022. In addition, the jury found McBride guilty of making a false statement to federal law enforcement and making a false declaration to the Court. The charges arise out of fraudulently claiming special status under a Small Business Administration (“SBA”) program in order to obtain the proceeds of a $99 million contract.
McBride and Odyssey were both charged in August of 2020 by a federal grand jury in Utah with conspiracy to commit wire fraud, wire fraud, and major contract fraud in relation to submitting fraudulent applications for a $99 million-dollar federal government contract in Fort Drum, New York. McBride was charged with additional felony counts related to perjury and making false statements during the criminal investigation and prosecution of her and Odyssey’s fraudulent business ventures.
McBride and Odyssey were charged with federal felony violations after investigators discovered, that in 2011, Odyssey fraudulently bid on a $99 million contract for work at the Fort Drum military base in New York. The contract had been set aside for qualified businesses operating in historically underutilized business zones (“HUBzones”) under an SBA program. Areas are qualified as HUBzones based upon historical unemployment and poverty levels, and also include areas such as Indian reservations and military base closure areas. To qualify for a HUBzone contract through the SBA, two requirements are that at least 35% of the business’s employees must reside in a HUBzone and the business must be a small business. Odyssey bid upon the contract knowing that it did not qualify for HUBzone contracts through the SBA because 35% of its employees did not reside in a HUBzone and because Odyssey was not a small business.
In pursuing the $99 million dollar Fort Drum contract, Odyssey’s officers and employees falsified information about who was working for Odyssey and where they worked. These efforts included recruiting employees to falsify their addresses on their driver’s licenses and voter’s registrations, temporarily placing HUBzone residents who did not actually work for the company on payroll in order to falsely claim them as employees and using a shell company to pay employees who did not reside in HUBzones off of Odyssey’s books in order to conceal them from the SBA.
It was further alleged at trial that Odyssey had also fraudulently gained admission to the SBA’s 8(a) program. That program is designed to provide contract opportunities to businesses owned by individuals who have personally experienced discrimination. The Defendants conceded at trial that Odyssey’s application to this program was fraudulent but claimed Odyssey’s CFO was solely responsible for the application. Over a period of about nine years, Odyssey obtained more than $200 million in contracts through this program.
Sentencing is currently set for September 1, 2022. The maximum penalties for the counts of conviction are twenty years’ imprisonment and a fine of up to twice the amount gained from the fraud.
The investigation also resulted in Odyssey’s former chief operating officer Michael Tingey and chief financial officer Paul Lee both previously entering guilty pleas to wire fraud, and the seizure of more than $7 million in assets.
This case was investigated by Special Agents from the FBI, the United States Army Criminal Investigations Division, United States Air Force Office of Special Investigations, IRS Criminal Investigation, and the Small Business Administration. Additional assistance was provided by other government agencies including the General Services Administration and the Department of the Interior. The case was prosecuted by Assistant United States Attorney Carl LeSueur and Assistant United States Attorney Aaron Clark.