A Colorado contractor has agreed to pay nearly $1.8 million in federal criminal penalties and profit forfeitures for conspiring to commit fraud and illegally obtaining U.S. government contracts intended for small, disadvantaged businesses, the Dept. of Justice said on Feb. 2.

MCC Construction Co., a construction-management firm and general contractor headquartered in Colorado, pled guilty to conspiring with two companies eligible for federal contracts set aside for SDBs, according to court documents. The firms did so with the understanding that MCC would illegally perform all of the work.

That allowed MCC to win 27 government contracts worth more than $70 million from 2008 to 2011. According to the court, the scheme resulted in a significant number of opportunities lost to legitimate small and disadvantaged firms.

“This conspiracy defrauded the government and denied small, disadvantaged businesses the opportunity to compete to do business with the United States,” Assistant Attorney General William J. Baer said in a statement.

As part of the scheme, MCC allowed the companies that were awarded the government contracts were to keep 3% of their value in exchange for MCC’s use of their small-business status to win the jobs.

For the contracts obtained through the scheme on which MCC made a profit, MCC’s profit was at least $1,269,294. The criminal penalty includes a $500,000 fine and a forfeiture money judgment of $1,269,294, according to court records.

A criminal filing in January in the U.S. District Court for the District of Columbia charged MCC with one count of knowingly and willfully conspiring to commit major fraud on the United States.

MCC waived the requirement to be charged by federal indictment, and U.S. District Judge Ketanji B. Jackson accepted the company’s guilty plea on Feb. 2. The plea agreement is subject to the court’s approval at a sentencing hearing scheduled for March 15.

Court documents said that MCC violated provisions of the U.S. Small Business Administration’s 8(a) program, which awards contracts to businesses owned by “socially and economically disadvantaged individuals.”

To qualify for the program, a business must be at least 51% owned, and—for the types of contracts investigated in the case—must perform at least 15% of the work with their own employees.

The court filing cited MCC for falsely representing to the government that: MCC workers were employees of the 8(a) firms; that MCC had obtained some contracts on behalf of the 8(a) companies without first informing them before bidding; and for conspiring with the 8(a) companies to hire straw employees whose wages and salaries actually were paid by MCC.

“MCC Construction Co. secured millions of dollars in contracts by hiding behind two small businesses that did not perform labor on the projects,” said Channing D. Phillips, U.S. Attorney for the District of Columbia.

MCC Construction Co. officials could not be reached for comment.