15 U.S.C. § 645 — Offenses and penalties

Page 1002 TITLE 15—COMMERCE AND TRADE § 645 1 So in original. Following provision probably should be set flush with par. (1). (C) best practices identified under para- graph (4) during such 1-year period. (c) Membership The Council shall be composed of the following members: (1) The Administrator of the Small Business Administration (or the designee of the Admin- istrator). (2) The Director of the Minority Business Development Agency. (3) The head of each Office of Small and Dis- advantaged Business Utilization in each Fed- eral agency having procurement powers. (d) Chairman The Council shall be chaired by the Adminis- trator of the Small Business Administration (or the designee of the Administrator). (e) Meetings The Council shall meet at the call of the chairman as necessary to consider proposed pro- curement regulations affecting the small busi- ness community. (f) Consideration of Council comments The Federal Acquisition Regulatory Council and other appropriate regulatory authorities shall consider comments submitted in a timely manner pursuant to subsection (b)(2). (Pub. L. 103–355, title VII, § 7104, Oct. 13, 1994, 108 Stat. 3369; Pub. L. 112–239, div. A, title XVI, § 1692, Jan. 2, 2013, 126 Stat. 2089.) Editorial Notes CODIFICATION Section was formerly set out as a note under section 644 of this title. Section was enacted as part of the Federal Acquisi- tion Streamlining Act of 1994, and not as part of the Small Business Act which comprises this chapter. AMENDMENTS 2013—Subsec. (b)(3) to (5). Pub. L. 112–239, § 1692(a), added pars. (3) to (5). Subsec. (c)(3). Pub. L. 112–239, § 1692(b), struck out ‘‘(established under section 644(k) of this title)’’ after ‘‘Utilization’’. Subsec. (d). Pub. L. 112–239, § 1692(c), inserted ‘‘(or the designee of the Administrator)’’ after ‘‘Small Business Administration’’. § 645. Offenses and penalties (a) False statements; overvaluation of securities Whoever makes any statement knowing it to be false, or whoever willfully overvalues any se- curity, for the purpose of obtaining for himself or for any applicant any loan, or extension thereof by renewal, deferment of action, or oth- erwise, or the acceptance, release, or substi- tution of security therefor, or for the purpose of influencing in any way the action of the Admin- istration, or for the purpose of obtaining money, property, or anything of value, under this chap- ter, shall be punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both. (b) Embezzlement, etc. Whoever, being connected in any capacity with the Administration, (1) embezzles, ab- stracts, purloins, or willfully misapplies any moneys, funds, securities, or other things of value, whether belonging to it or pledged or oth- erwise entrusted to it, or (2) with intent to de- fraud the Administration or any other body politic or corporate, or any individual, or to de- ceive any officer, auditor, or examiner of the Administration, makes any false entry in any book, report, or statement of or to the Adminis- tration, or, without being duly authorized, draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof, or (3) with intent to defraud participates or shares in or receives directly or indirectly any money, profit, property, or ben- efit through any transaction, loan, commission, contract, or any other act of the Administra- tion, or (4) gives any unauthorized information concerning any future action or plan of the Ad- ministration which might affect the value of se- curities, or, having such knowledge, invests or speculates, directly or indirectly, in the securi- ties or property of any company or corporation receiving loans or other assistance from the Ad- ministration, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than five years, or both. (c) Concealment, etc. Whoever, with intent to defraud, knowingly conceals, removes, disposes of, or converts to his own use or to that of another, any property mortgaged or pledged to, or held by, the Admin- istration, shall be fined not more than $5,000 or imprisoned not more than five years, or both; but if the value of such property does not exceed $100, he shall be fined not more than $1,000 or imprisoned not more than one year, or both. (d) Misrepresentation, etc. (1) Whoever misrepresents the status of any concern or person as a ‘‘small business con- cern’’, a ‘‘qualified HUBZone small business con- cern’’, a ‘‘small business concern owned and con- trolled by service-disabled veterans’’, a ‘‘small business concern owned and controlled by vet- erans’’, a ‘‘small business concern owned and controlled by socially and economically dis- advantaged individuals’’, or a ‘‘small business concern owned and controlled by women’’, in order to obtain for oneself or another any— (A) prime contract to be awarded pursuant to section 637, 638, 644, 657a, 657f, or 657f–1 of this title; (B) subcontract to be awarded pursuant to section 637(a) of this title; (C) subcontract that is to be included as part or all of a goal contained in a subcontracting plan required pursuant to section 637(d) of this title; or (D) prime or subcontract to be awarded as a result, or in furtherance, of any other provi- sion of Federal law that specifically references section 637(d) of this title for a definition of program eligibility,1 shall be subject to the penalties and remedies described in paragraph (2). (2) Any person who violates paragraph (1) shall— Page 1003 TITLE 15—COMMERCE AND TRADE § 645 2 See References in Text note below. (A) be punished by a fine of not more than $500,000 or by imprisonment for not more than 10 years, or both; (B) be subject to the administrative rem- edies prescribed by the Program Fraud Civil Remedies Act of 1986 2 (31 U.S.C. 3801–3812); (C) be subject to suspension and debarment as specified in subpart 9.4 of title 48, Code of Federal Regulations (or any successor regula- tion); and (D) be ineligible for participation in any pro- gram or activity conducted under the author- ity of this chapter or the Small Business In- vestment Act of 1958 (15 U.S.C. 661 et seq.) for a period not to exceed 3 years. (3) LIMITATION ON LIABILITY.—This subsection shall not apply to any conduct in violation of subsection (a) if the defendant acted in good faith reliance on a written advisory opinion from a Small Business Development Center (as defined in this chapter), or an entity partici- pating in the Procurement Technical Assistance Cooperative Agreement Program defined in chapter 388 of title 10; however nothing in this chapter shall obligate either entity to provide such a letter nor shall the provision of such a letter in any way render the providing entity liable to the business concern should the Admin- istrator later determine that the concern is not a small business concern. Upon issuance of an advisory opinion under this paragraph, the enti- ty issuing the advisory opinion shall remit a copy of the opinion to the General Counsel of the Administration, who may reject the advi- sory opinion. If the General Counsel of the Ad- ministration rejects the advisory opinion, the Administration shall notify the entity issuing the advisory opinion and the recipient of the opinion, after which time the business concern may not rely upon the opinion. (e) Representations under subsection (d) to be in writing Any representation of the status of any con- cern or person as a ‘‘small business concern’’, a ‘‘HUBZone small business concern’’, a ‘‘small business concern owned and controlled by serv- ice-disabled veterans’’, a ‘‘small business con- cern owned and controlled by veterans’’, a ‘‘small business concern owned and controlled by socially and economically disadvantaged in- dividuals’’, or a ‘‘small business concern owned and controlled by women’’ in order to obtain any prime contract or subcontract enumerated in subsection (d) of this section shall be in writ- ing. (f) Misrepresentation of compliance with section 636(j)(10)(I) Whoever falsely certifies past compliance with the requirements of section 636(j)(10)(I) of this title shall be subject to the penalties prescribed in subsection (d). (g) Subcontracting limitations (1) In general Whoever violates a requirement established under section 657s of this title shall be subject to the penalties prescribed in subsection (d), except that, for an entity that exceeded a lim- itation on subcontracting under such section, the fine described in subsection (d)(2)(A) shall be treated as the greater of— (A) $500,000; or (B) the dollar amount expended, in excess of permitted levels, by the entity on sub- contractors. (2) Monitoring Not later than 1 year after January 2, 2013, the Administrator shall take such actions as are necessary to ensure that an existing Fed- eral subcontracting reporting system is modi- fied to notify the Administrator, the appro- priate Director of the Office of Small and Dis- advantaged Business Utilization, and the ap- propriate contracting officer if a requirement established under section 657s of this title is violated. (Pub. L. 85–536, § 2[16], July 18, 1958, 72 Stat. 395; Pub. L. 88–264, § 2, Feb. 5, 1964, 78 Stat. 8; Pub. L. 99–272, title XVIII, § 18009, Apr. 7, 1986, 100 Stat. 368; Pub. L. 100–656, title IV, § 405, Nov. 15, 1988, 102 Stat. 3875; Pub. L. 103–355, title VII, § 7106(c), Oct. 13, 1994, 108 Stat. 3376; Pub. L. 105–85, div. A, title X, § 1073(g)(4), Nov. 18, 1997, 111 Stat. 1906; Pub. L. 105–135, title VI, § 603(c), Dec. 2, 1997, 111 Stat. 2632; Pub. L. 112–239, div. A, title XVI, §§ 1652, 1681(a), 1682(a), Jan. 2, 2013, 126 Stat. 2081, 2085, 2086; Pub. L. 116–283, div. A, title VIII, § 862(d)(2), Jan. 1, 2021, 134 Stat. 3780; Pub. L. 117–81, div. A, title XVII, § 1702(e)(6), Dec. 27, 2021, 135 Stat. 2157.) Editorial Notes REFERENCES IN TEXT The Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801–3812), referred to in subsec. (d)(2)(B), subse- quently renamed the Administrative False Claims Act, is subtitle B of title VI of Pub. L. 99–509, Oct. 21, 1986, 100 Stat. 1934, which is classified generally to chapter 38 (§ 3801 et seq.) of Title 31, Money and Finance. For com- plete classification of this Act to the Code, see Short Title note set out under section 3801 of Title 31 and Ta- bles. The Small Business Investment Act of 1958, referred to in subsec. (d)(2)(D), is Pub. L. 85–699, Aug. 21, 1958, 72 Stat. 689, which is classified principally to chapter 14B (§ 661 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 661 of this title and Tables. PRIOR PROVISIONS Prior similar provisions were contained in section 209 of act July 30, 1953, ch. 282, title II, 67 Stat. 237, which was previously classified to section 638 of this title. The provisions of section 216 of act July 30, 1953, formerly classified to this section, were transferred to section 2[8] of Pub. L. 85–536, which was classified to section 637(c) of this title prior to repeal by Pub. L. 102–191. See section 656 of this title. AMENDMENTS 2021—Subsec. (d)(1). Pub. L. 116–283, § 862(d)(2)(A)(i), substituted ‘‘ ‘small business concern’,’’ for ‘‘ ‘small business concern’,,’’ and ‘‘, a ‘small business concern owned and controlled by service-disabled veterans’, a ‘small business concern owned and controlled by vet- erans’, a ‘small business concern owned and controlled by socially and economically disadvantaged individ- uals’ ’’ for ‘‘, a ‘small business concern owned and con- trolled by socially and economically disadvantaged in- dividuals’ ’’ in introductory provisions. Page 1004 TITLE 15—COMMERCE AND TRADE § 645a Subsec. (d)(1)(A). Pub. L. 116–283, § 862(d)(2)(A)(ii), sub- stituted ‘‘section 637, 638, 644, 657a, 657f, or 657f–1’’ for ‘‘section 638, 644, or 657a’’. Subsec. (d)(3). Pub. L. 117–81 substituted ‘‘chapter 388’’ for ‘‘chapter 142’’. Subsec. (e). Pub. L. 116–283, § 862(d)(2)(B), substituted ‘‘ ‘small business concern’,’’ for ‘‘ ‘small business con- cern’,,’’ and ‘‘, a ‘small business concern owned and controlled by service-disabled veterans’, a ‘small busi- ness concern owned and controlled by veterans’, a ‘small business concern owned and controlled by so- cially and economically disadvantaged individuals’ ’’ for ‘‘, a ‘small business concern owned and controlled by socially and economically disadvantaged individ- uals’ ’’. 2013—Subsec. (d)(2)(C). Pub. L. 112–239, § 1682(a), struck out ‘‘on the basis that such misrepresentation indicates a lack of business integrity that seriously and directly affects the present responsibility to perform any contract awarded by the Federal Government or a subcontract under such a contract’’ after ‘‘regula- tion)’’. Subsec. (d)(3). Pub. L. 112–239, § 1681(a), added par. (3). Subsec. (g). Pub. L. 112–239, § 1652, added subsec. (g). 1997—Subsec. (d)(1). Pub. L. 105–135, § 603(c)(1)(A), in- serted ‘‘, a ‘qualified HUBZone small business con- cern’,’’ after ‘‘ ‘small business concern’,’’. Pub. L. 105–85 substituted ‘‘concern owned and con- trolled by women’’ for ‘‘concerns owned and controlled by women’’. Subsec. (d)(1)(A). Pub. L. 105–135, § 603(c)(1)(B), sub- stituted ‘‘section 638, 644, or 657a’’ for ‘‘section 638 or 644’’. Subsec. (e). Pub. L. 105–135, § 603(c)(2), inserted ‘‘, a ‘HUBZone small business concern’,’’ after ‘‘ ‘small busi- ness concern’,’’. Pub. L. 105–85 substituted ‘‘concern owned and con- trolled by women’’ for ‘‘concerns owned and controlled by women’’. 1994—Subsec. (d)(1). Pub. L. 103–355, § 7106(c)(1), sub- stituted ‘‘, a ‘small business concern owned and con- trolled by socially and economically disadvantaged in- dividuals’, or a ‘small business concerns owned and con- trolled by women’ ’’ for ‘‘or ‘small business concern owned and controlled by socially and economically dis- advantaged individuals’ ’’. Subsec. (e). Pub. L. 103–355, § 7106(c)(2), substituted ‘‘, a ‘small business concern owned and controlled by socially and economically disadvantaged individuals’, or a ‘small business concerns owned and controlled by women’ ’’ for ‘‘or ‘small business concern owned and controlled by socially and economically disadvantaged individuals’ ’’. 1988—Subsec. (d). Pub. L. 100–656, § 405(a), amended subsec. (d) generally, designating existing provisions as par. (1), redesignating former pars. (1) to (4) as subpars. (A) to (D), respectively, and in subpar. (D), substituting ‘‘subject to the penalties and remedies described in paragraph (2)’’ for ‘‘punished by a fine of not more than $50,000 or by imprisonment for not more than five years, or both’’, and adding par. (2). Subsec. (f). Pub. L. 100–656, § 405(b), added subsec. (f). 1986—Subsecs. (d), (e). Pub. L. 99–272 added subsecs. (d) and (e). 1964—Subsec. (c). Pub. L. 88–264 added subsec. (c). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105–135 effective Oct. 1, 1997, see section 3 of Pub. L. 105–135, set out as a note under section 631 of this title. EFFECTIVE DATE OF 1994 AMENDMENT For effective date and applicability of amendment by Pub. L. 103–355, see section 10001 of Pub. L. 103–355, set out as a note under section 8752 of Title 10, Armed Forces. REGULATIONS Pub. L. 112–239, div. A, title XVI, § 1681(b), Jan. 2, 2013, 126 Stat. 2085, provided that: ‘‘Not later than 270 days after the date of enactment of this part [Jan. 2, 2013], the Administrator of the Small Business Administra- tion shall issue rules defining what constitutes an ade- quate advisory opinion for purposes of section 16(d)(3) of the Small Business Act [15 U.S.C. 645(d)(3)].’’ DEVELOPMENT AND PROMULGATION OF GUIDANCE Pub. L. 112–239, div. A, title XVI, § 1682(b), Jan. 2, 2013, 126 Stat. 2086, provided that: ‘‘Not later than 270 days after the date of enactment of this part [Jan. 2, 2013], the Administrator of the Small Business Administra- tion shall develop and promulgate guidance imple- menting this section [amending this section and enact- ing provisions set out as a note below].’’ PUBLICATION OF PROCEDURES REGARDING SUSPENSION AND DEBARMENT Pub. L. 112–239, div. A, title XVI, § 1682(c), Jan. 2, 2013, 126 Stat. 2086, provided that: ‘‘Not later than 270 days after the date of enactment of this part [Jan. 2, 2013], the Administrator [of the Small Business Administra- tion] shall publish and maintain on the [Small Busi- ness] Administration’s Web site the current standard operating procedures of the Administration for suspen- sion and debarment, and the name and contact infor- mation for the individual designated by the Adminis- trator as the senior individual responsible for suspen- sion and debarment proceedings.’’ § 645a. Annual report on suspensions and debarments proposed by Small Business Ad- ministration (a) Report requirement The Administrator of the Small Business Ad- ministration shall submit each year to the Com- mittee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business of the House of Representatives a re- port on the suspension and debarment actions taken by the Administrator during the year pre- ceding the year of submission of the report. (b) Matters covered The report required by subsection (a) shall in- clude the following information for the year covered by the report: (1) Number The number of contractors proposed for sus- pension or debarment. (2) Source The office within a Federal agency that originated each proposal for suspension or de- barment. (3) Reasons The reason for each proposal for suspension or debarment. (4) Results The result of each proposal for suspension or debarment, and the reason for such result. (5) Referrals The number of suspensions or debarments referred to the Inspector General of the Small Business Administration or another agency, or to the Attorney General (for purposes of this paragraph, the Administrator may redact identifying information on names of compa- nies or other information in order to protect the integrity of any ongoing criminal or civil investigation). (Pub. L. 112–239, div. A, title XVI, § 1683, Jan. 2, 2013, 126 Stat. 2086.)