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A reporter duped: How I got fooled by a fraud

Friday - 6/28/2013, 4:33pm  ET

I like to think that it's not often that I'm duped. So it came as both a surprise and an insult of sorts to learn that a source — one that offered quite compelling testimony before Congress about how insourcing had left her company on the brink of bankruptcy — was a complete fraud.

Here's how I began a July 2011 article, which detailed the impact of federal government's initiative to bring contract work inside, to be performed by federal employees:

"Dawn Hamilton got a phone call that was devastating for her Arlington security consulting business, ironically, two days before this past Christmas. Her biggest client, the Coast Guard, was canceling a five-year contract two years early, opting to bring in-house the work processing merchant credentials that Security Assistance Corp. had been doing.

CEO Hamilton stood by helplessly as 75 percent of her company’s total revenue and 68 of her 120 employees disappeared with the Coast Guard contract, leaving her business on life support. That one contract supplied $8 million of the company’s $12 million in revenue for fiscal 2010 alone."

So where is Hamilton now? Awaiting sentencing in U.S. District Court in Alexandria for acting as a figure­head CEO of a shell company in a scheme to win government work meant for minority-owned businesses, The Washington Post reported. Prosecutors have asked that Hamilton of Brownsville, Md., spend five years in prison for her role in the scheme — doing virtually no work, but raking in a six-figure salary, according to court documents.

It's worth noting that she pleaded guilty in March. But because I wrote the original article two years ago, it took me some time to connect the dots.

So what's worse than a reporter getting fooled? Congress falling for the sham too. On June 23, 2011, Hamilton told the House Small Business Committee her sob story, which is actually what led me to interview her in the first place.

And perhaps saddest of all: The idea that this woman's actions just might cause others to dismiss the struggles endured by legitimate small businesses, even as they allowed her to pocket hundreds of thousands of dollars under a program intended to help the most desperate companies succeed.

© 2013 American City Business Journals, Inc.