IT firms part of $16M false claims settlement


Virginia-based contractor ADS Inc. said it would pay the federal government $16 million to settle bid-rigging conspiracy and false claims allegations brought in a whistleblower lawsuit.

The Justice Department said in an Aug. 10 statement that the $16 million was "one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility."

The settlement resolves allegations with no determination of liability.

According to the statement, the payment covers ADS and five affiliated companies that allegedly received contracts by concealing their relationship with ADS to qualify for contract set-asides by the government for small or disadvantaged businesses.  

The ADS affiliates named in the case include Mythics Inc., London Bridge Trading Co. Ltd., as well as MJL Enterprises LLC, SEK Solutions LLC and Karda Systems LLC.

A spokesperson for the General Services Administration Office of Inspector General confirmed that Mythics Inc. is a reseller of Oracle cloud services and products to federal and local governments, as well as commercial businesses, utilities and education markets.

In a press statement ADS said, "The settlement marks the end of the DOJ’s investigation into the company's past eligibility to bid on federal set-aside contracts, and other allegations regarding bidding on contracts. ADS believes it has always complied with standards promulgated by the Small Business Administration."

The statement added that ADS' decision to settle the case came "after incurring millions of dollars in legal fees and countless hours of time value over three years responding to interrogatories and burdensome document requests by the government, hindering the company’s ability to continue serving its customers and employing its people."

Ameliorate Partners, which filed the whistleblower lawsuit against ADS, will receive $2.9 million as part of the settlement.

The matter was investigated by the Justice Department in conjunction with the GSA's IG office and the Small Business Administration.

About the Author

Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at [email protected] or follow him on Twitter at @MRockwell4.


  • Government Innovation Awards
    Government Innovation Awards -

    Congratulations to the 2021 Rising Stars

    These early-career leaders already are having an outsized impact on government IT.

  • Acquisition
    Shutterstock ID 169474442 By Maxx-Studio

    The growing importance of GWACs

    One of the government's most popular methods for buying emerging technologies and critical IT services faces significant challenges in an ever-changing marketplace

Stay Connected