Defense contractors agree $3.6 million fraud settlement over veteran-owned contract allegations

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Defense contractors fraud settlement

Highlights

Officium Global LLC and Loyal Source Government Services LLC will pay over $3.6 million to resolve False Claims Act and Contract Disputes Act allegations over fraudulent veteran-owned contract claims.
Authorities allege Officium Global misrepresented itself as a service-disabled veteran-owned small business for government set-aside contracts between May 2017 and June 2018, with Loyal Source causing related breaches.
The Defense Contract Audit Agency's Operations Investigative Support division quantified the financial impact of the fraud, directly informing the $3.6 million settlement amount.

Settlement terms and investigative findings

As reported by Defense Contract Audit Agency, Officium Global LLC and Loyal Source Government Services LLC have agreed to pay a combined total of more than $3.6 million to resolve allegations under the False Claims Act and the Contract Disputes Act.

Authorities say Officium Global falsely represented itself as a service-disabled veteran-owned small business in order to win several government set-aside contracts between May 2017 and June 2018. In a related action, Loyal Source Government Services allegedly caused breaches of those same contracts in connection with Officium Global's representations.

The case is jointly investigated and prosecuted by the Army Criminal Investigation Division and the Department of Justice Middle District of Florida.

DCAA role in contract fraud enforcement

The Defense Contract Audit Agency says its Operations Investigative Support division plays a central role in the resolution by quantifying the financial impact of the alleged fraud. The agency says those calculations form the sole damages basis for the final settlement amount.

DCAA says the work includes contributions from OIS auditor Vanetia Ralston, former OIS auditors Lora Blackburn, Amarillis Velez-Diaz, Oscar Hopkins and Shelley Posner, OIS supervisory auditors Sandy Storzieri, John Montera and Linda Bettis, and former OIS supervisory auditor Beverly Peery.

The settlement underscores continued government scrutiny of contractor eligibility claims tied to programs intended for service-disabled veterans, an area where compliance failures can lead to financial penalties and contract disputes.

Our previous coverage looked at Labcorp’s $14.5 million settlement to resolve False Claims Act allegations tied to Medicare billing for allegedly medically unnecessary urine drug testing under its ToxAssure Comprehensive panel. We noted the government’s focus on billing practices that combine presumptive and definitive testing codes, and framed the case as part of a broader crackdown on fraud, waste, and abuse in federal healthcare programs.

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