WASHINGTON (Legal Newsline) — The U.S. Department of Justice announced Aug. 10 that ADS Inc. and its subsidiaries will pay $16 million after allegations of violating the False Claims Act.

ADS allegedly conspired with and caused certain small businesses to fraudulently obtain government contracts and then submit false claims to the government.

“Small or disadvantaged businesses serve as important engines of economic growth, and the United States utilizes small business set-aside contracts to aide those businesses in their development,” said acting assistant attorney general Chad A. Readler of the Justice Department’s Civil Division. “When ineligible companies improperly obtain set-aside contracts, they prevent the small business community from receiving the assistance that Congress intended.”

The small businesses that were purportedly affiliated with ADS include Mythics Inc., London Bridge Trading Co. Ltd., MJL Enterprises LLC, SEK Solutions LLC and Karda Systems LLC.

“This settlement reflects the government’s commitment to ensure that its business partners are truthful in their dealings with the United States,” said U.S. attorney Channing D. Phillips for the District of Columbia. “Contractors who attempt to disguise or misrepresent themselves to obtain funds reserved to promote small and disadvantaged businesses will be held accountable for their fraud on the public.”

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