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SEK Solutions, Karda Systems & MJL Enterprises LLC Pay $620,000 Settlement With DoJ Over Allegations Of Violation Of False Claims Act

Tidewater of Virginia-based businesses Karda Systems LLC, SEK Solutions, and MJL Enterprises LLC have settled with the Department of Justice over allegations of violations of the false claims act. The DoJ claims these companies, as well as ADS, Inc, misrepresented their status for set-aside business with the US government. Last Summer, ADS settled the same suit for $16 million.

Specifically, the claims are that SEK Solutions falsely claimed eligibility for set-asides for women-owned small businesses, MJL claimed it was service disabled veteran-owned firm and that both SEK Solutions and Karda misrepresented themselves as socially or economically disadvantaged businesses (8(a)).

This was a “qui tam” lawsuit that was filed under the whistle blower provision of the False Claims Act in which a private party, Ameliorate Partners, a Delaware limited liability partnership, sued on behalf of the government for a portion of the settlement. So far Ameliorate Partners is said to have received over $3 million.

In the settlement, MJL Enterprises Inc agreed to pay $400,000, SEK Solutions agreed to pay $140,000, and Karda Systems, LLC agreed to pay $80,000.

Considering the legal bills which are sure to have piled up since the suit was first filed in 2013, it’s not surprising the firms settled. With the settlement comes no admission of wrongdoing and brings the suit to a close.

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13 Responses to “SEK Solutions, Karda Systems & MJL Enterprises LLC Pay $620,000 Settlement With DoJ Over Allegations Of Violation Of False Claims Act”

  1. jbgleason says:

    I would be curious to know how much the parties profited from their false claims compared to what they paid in the settlement.

  2. AttackBlue1 says:

    I’m curious how many of these companies share employees.

  3. Mike says:

    Been in the business a long time and seen time and time again, doing dishonest and crooked things pays big. Almost every company that I have seen caught up always seems to land on their feet and keep going just fine. These fines many times are a drop in the bucket to what they made. Integrity and Honor matter but from what I have seen does not pay as well. It would be nice if companies that get caught up actually get shut down. For some of these mentioned it’s not the first time and won’t be the last. There’s one company that you see on SSD regularly where the company makes a ton from DOS legitimately and at the same time the owner , convicted of a felony for defrauding the same entity DOS, and again. Continues on just fine.

  4. FedBizOps says:

    Go through the back room in any of those places and you ends up in the ADS warehouse. I’ve been wondering when the jig would be up on that scam.

  5. FALSE CLAIMS says:

    I read this article in the Virginia Pilot and it is written in a way to say that the companies are guilty. They fail to mention that SEK and Karda were certified by the SBA as an 8A company and later graduated from the program. Also SEK was indeed owned by a minority woman. MJL is in fact owned by a retired disabled USN Master Diver who is actively involved with the company. Facts are, anyone can claim anything under the Whistle Blowers provision and the Government has to investigate. These investigations are long, arduous, and cost these companies large amounts of money to defend themselves. So much that companies finally have to say we can no longer afford to pay, lets settle. If nothing is found, the Government will not say that until the very last sentence of a press release. Instead they will brag about how much money collected in fines.

    • Matt says:

      As someone who worked alongside of SEK at ADS, yes I can confirm that SEK was owned by a minority woman, but it was ran and operated by her husband. She was an owner in name only. It is a very crooked and common way in which companies abuse and exploit the Woman Owned programs. Instances such as this completely undermine everything these programs are built to accomplish. A diversified marketplace in which innovation, affordability, and creativity flourish, instead of corrouption and monopolies, cannot exist until we stop supporting and making excuses for companies (“friends”) that intend to rob us, our businesses, and our government. These companies are everything that is wrong with us and nothing that is right. “Loopholes” may coincide with legalities but most definitely not with moralities.

  6. claims not false says:

    Everyone in this industry knows that the claims are not false, it should cost them a lot more. I don’t care if you are a minority or if you have served. Get in line. That doesn’t give you the right to screw over not only other companies but you are taking taxpayer dollar and a lot of times you are screwing the military. I have called SEK asking for a quote and I get it and an hour later I get one from ADS, and then I get one from a “third” company that should have nothing to do with it but all three, send the same info and just the heading is different and I had never called them. Please don’t claim the high ground when the industry knows that you don’t have it and never will

    • SSD says:

      I’m trying to figure out if you’re a competitor or customer. You present yourself as a competitor, but talk about requesting quotes. If you’re a customer, you know you generally need three quotes. Those are the rules. If you don’t want them from other companies, tell them. It avoids wasting the time of companies you have no intention of buying from.

      Additionally, there are laws which require the government to buy from several groups, including minorities, women and disabled veterans. Since you seem to harbor so much animosity toward those set asides, go talk to a contracts specialist to ensure you aren’t violating the law in your interaction with those companies. If you’re a contacts specialist and are publicly berating set asides, pray none of those companies figure out who you are.

      If you’re a competitor, don’t do what these companies have done.

      • claims not false says:

        I was a customer, and yes you need three quotes, but when you call one company and other companies, magically know you asked for one and they send it to you. without you asking that is a problem. As it is obvious that all three are owned by one, but all are listed as a small business. I have no problem with set-asides or if a business is a vet or minority-owned. But don’t use those rules and still do the wrong thing. I am not going to feel sorry for any company that misrepresents what they are. I think my point was that this system is broken and needs to be fixed. and I am not a competitor I have just been around this a long time. I want the warfighter to get what they need.

  7. PR Mafia says:

    SSD – you should investigate the corruption of the companies that dominate the Molle Contracts for the DOD. Ironically most all kit produced comes from the island of Puerto Rico. I’ll give you a starting point that is parrell to this post and will keep your readers engaged. What is the connection between Propper INT and A woman owned small business M&M ???

    • Vic Toree says:

      P.R. labor is cheaper than CONUS labor and it still qualifies as Berry Amendment Compliant (assuming good raw material) since its a U.S. territory. Nothing ironic about that being a source for gear.