Widespread business fraud alleged

Companies collected millions of dollars in government contracts by claiming to have main offices in poor neighborhoods that were actually empty duplexes, part-time offices and other ineligible locations, the Government Accountability Office reported.

Billions remain at risk because the Small Business Administration doesn’t usually check paperwork, rarely conducts audits and is slow to eject firms that are no longer eligible for the $8 billion in special contract set-asides for small businesses, the GAO said.

The agency agreed with the findings and said it was reviewing its Historically Underutilized Business Zone program.

The House Committee on Small Business requested the reports and plans to hold hearings on the issue today.