Hemal Ramesh Jhaveri, Defrauding the U.S. Government, Colorado 2015

Denver, CO – In a shocking turn of events, Hemal Ramesh Jhaveri, a 52-year-old businessman from Lone Tree, Colorado, has pleaded guilty to conspiring to defraud the United States government.

According to the indictment, Jhaveri, the founder and sole owner of SofTec Solutions, Inc., a company based in Englewood, Colorado, participated in the Small Business Administration’s 8(a) Business Development Program between 2001 and 2010. During this period, the company received government contracts worth over $17,000,000 for providing clerical and administrative support and other services.

However, Jhaveri allegedly diverted millions of dollars from SofTec Solutions to his personal bank accounts and other entities, including a restaurant and a dormant company. The diverted funds were used for personal expenses, including the purchase of a $3,000,000 residence in Lone Tree, Colorado, and to pay his alimony payments.

Jhaveri never informed the Small Business Administration (SBA) about the diverted funds, which exceeded the program’s limits. As a result, he willfully failed to report the diverted money on his federal income tax returns, causing a tax loss of $1,171,179.

As a result of his guilty plea, Jhaveri faces up to 5 years in federal prison and a fine of up to $250,000. He is currently free on bond and is scheduled to be sentenced on June 15, 2015.

The case was investigated by the IRS-Criminal Investigation, Department of Defense-Office of Inspector General-Defense Criminal Investigative Service, General Services Administration-Office of the Inspector General, Army Criminal Investigation Command-Colorado Fraud Resident Agency-Major Procurement Fraud Unit, Small Business Administration-Office of the Inspector General, and the Special Enforcement Program of the Internal Revenue Service.

Jhaveri’s actions have left many questioning the integrity of the 8(a) Business Development Program. The program is designed to help small businesses owned and controlled by socially and economically disadvantaged individuals. However, Jhaveri’s case highlights the potential for abuse and exploitation of the program.

As the investigation continues, it remains to be seen how Jhaveri’s case will impact the 8(a) Business Development Program and the government’s efforts to prevent similar cases of fraud and abuse in the future.

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