August 10, 2017
Virginia Beach-based contractor ADS Inc.
and its subsidiaries agreed to pay $16 million to settle allegations that they violated the False Claims Act by conspiring with and causing purported small businesses to submit false claims for payment in connection with fraudulently obtained small business contracts. The settlement further resolves allegations that ADS engaged in improper bid rigging relating to certain of the fraudulently obtained contracts. The settlement ranks as one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility. The purported small businesses affiliated with ADS include Mythics Inc.
, London Bridge Trading Co. Ltd.
, and MJL Enterprises LLC
, which falsely claimed to be an eligible service-disabled veteran-owned company, and SEK Solutions LLC
and Karda Systems LLC
, both of which falsely claimed to qualify as socially or economically disadvantaged businesses under the Small Business Administration’s 8(a) Business Development Program. The allegations originated in a whistleblower lawsuit filed under the qui tam
provisions of the False Claims Act by Ameliorate Partners LLP
. It will receive a whistleblower award of roughly $2.9 million