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Federal contractor pays $435K to resolve False Claims Act exposure

AFOSI Office of Procurement Fraud Investigations Detachment 6, Operating Location-A, Hanscom Air Force Base, Mass., joined four fellow federal agencies in a collaborated effort to resolve a False Claims Act investigation into a company's cost-based billing on government contracts. The contractor agreed to pay more than $435K to settle the case. (AFOSI graphic)

AFOSI Office of Procurement Fraud Investigations Detachment 6, Operating Location-A, Hanscom Air Force Base, Mass., joined four fellow federal agencies in a collaborated effort to resolve a False Claims Act investigation into a company's cost-based billing on government contracts. The contractor agreed to pay more than $435K to settle the case. (AFOSI graphic)

SYRACUSE, N.Y. --

Silvus Technologies, Inc., a California-based company specializing in wireless communication systems, agreed July 25, 2019, to pay $435,806 to resolve a False Claims Act investigation into the company’s cost-based billing on government contracts. 

“This settlement reflects the Northern District of New York’s continued commitment to using civil enforcement tools to recover money wrongfully paid by the government,” said United States Attorney Grant C. Jaquith. “It is critical that government contractors have internal controls in place to ensure that cost-based billings are fair and accurate.”

This case was investigated by the Air Force Office of Special Investigations Procurement Fraud Detachment 6, Operating Location-A, Hanscom Air Force Base, Mass., the Defense Criminal Investigative Service and the Army Criminal Investigation Command. Additional investigative assistance was provided by the Defense Contract Audit Agency and the Air Force Materiel Command Law Office Fraud Division. 

According to the settlement agreement, the government overpaid Silvus on three different Air Force contracts. The overpayments were due to Silvus’s failure to track accurately its direct labor costs and certain indirect costs (including tax payments). Silvus improperly attributed some employee labor costs to the contracts and included certain unallowable charges in its incurred cost proposals.

“The announced settlement sends a clear message that those who inappropriately profit by willfully disregarding established Department of Defense procurement protocols will be investigated and held accountable,” said Bryan D. Denny, Special Agent in Charge of the Western Field Office, Defense Criminal Investigative Service. “Those who contract with the Department of Defense must be above reproach. The Defense Criminal Investigative Service will continue to investigate anyone who seeks to compromise the procurement system at the expense of the U.S. military and taxpayers.”

The United States was represented by Assistant U.S. Attorney Michael D. Gadarian.