BUFFALO, N.Y. -- Two technology companies and a corporate executive agreed to pay $223,618 to resolve allegations stemming from an Air Force Office of Special Investigations-led case into an Air Force and Navy-funded research award.
According to the U.S. Attorney’s Office for the Western District of New York, the False Claims Act allegations involve certifications made by Advanced Global Services (AGS), Ltd. and Gennady Yumshtyk to obtain funding through the Small Business Innovation Research program (SBIR).
Gennady and AGS made the certifications to the government, and the work was passed through to another company, Paradigm Shift.
“SBIR awards depend on honest disclosures and fair competition,” said Jason Hein, director of the AFOSI Office of Procurement Fraud. “Our investigations help ensure these opportunities remain available to the American small businesses the program was created to support.”
According to the Justice Department, AGS got a 2019 Air Force SBIR award to develop gun barrel coating technology after certifying the work would be done in the United States.
Instead, Paradigm Shift Technologies allegedly conducted the research at its facility in Toronto, Canada, making the defendants ineligible for the program.
“Protecting the integrity of the federal procurement process is a top priority for [AFOSI],” said Special Agent-in-Charge Sandy Nezi, AFOSI PF Det. 6. “When contractors misrepresent their eligibility and location of work to secure taxpayer funds, they undermine programs designed to support genuine American small businesses.
“We will continue to work with our partners to aggressively investigate with our joint partners and hold accountable those who attempt to defraud the Department of the Air Force,” she added.
Investigators from the Naval Criminal Investigative Service (NCIS) worked closely with AFOSI PF members in the investigation, officials said.
“Working alongside NCIS allowed us to combine our skills and follow the allegations across service lines,” Nezi said. “Joint collaboration strengthens our ability to protect defense programs from procurement fraud.”
The settlement resolves allegations contained in a civil complaint filed Nov. 24, 2025, in the U.S. District Court for the Western District of New York.
The investigation was led by AFOSI PF Det. 6 OL-C in Rome, New York, and involved the NCIS Economic Crimes Field Office, Assistant U.S. Attorney David M. Coriell and Investigator Peggy McFarland of the U.S. Attorney’s Office for the Western District of New York.
“This outcome reflects the outstanding work of AFOSI PF Det. 6 and the strength of our partnerships with NCIS and DOJ,” Hein said. “I’m proud of the team’s dedication to protecting defense resources and preserving trust in the acquisition system.”
Editor’s note: The claims resolved through the settlement are allegations only. There has been no determination or admission of liability.