NASA contractor settles veteran's preference contract fraud whistleblower suit

by Ben Vernia | September 21st, 2011

The Department of Justice announced on September 21 that a Michigan-based company has paid $800,000 to settle claims that it falsely participated in a veteran’s preference contract program. According to DOJ’s press release:

WASHINGTON – Lydia Demski, the owner of Deerpath Corp., has agreed to pay the United States $800,000 to resolve allegations that she and her companies, including Deerpath Corp., Scope Services Inc. and American Nuclear Resources Inc. knowingly caused false claims to be submitted relating to a contract to provide re-furbishment of equipment at the National Aeronautics and Space Administration’s (NASA) Plumbrook facility in Sandusky, Ohio, the Justice Department announced today.

The re-furbishment contract at Plumbrook was set aside by NASA to be performed by a Service-Disabled Veteran-Owned Small Business (SDVOSB). Under that set-aside program, one or more service-disabled veterans must own and control the small business. The United States alleged that Demski, who is not a service-disabled veteran, organized and controlled a business called Deerpath International in order to capture SDVOSB set-aside contracts and funnel the work to her St. Joseph., Mich.-based company, Deerpath Corp.

DOJ announced that the whistleblower will receive $140,000 (a 17.5% relator’s share).

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