Cloud contractor to pay U.S. $9M to settle false claims charges

Global Computer Enterprises, a now-defunct federal contractor, and its owner Ray Muslimani, agreed to pay $9 million to the federal government to settle charges that GCE hid its use of prohibited employees on federal contracts with the Department of Labor and the U.S. Equal Employment Opportunity Commission. GCE supplied a cloud-based financial management service. GCE allegedly concealed is use of engineers and other employees who could not work on federal contracts due to their citizenship or U.S. immigration status.

GCE also supplied software development services to the Coast Guard, the Secret Service, and the General Services Administration, and it is alleged that in those contracts the firm "repeatedly misrepresented and/or concealed" the use of prohibited employees, for reasons of lack of security clearance, or overseas location, per a statement from the U.S. Attorney's Office for the Eastern District of Virginia.

The FBI raided GCE's offices in 2013 to investigate allegations that the contractor was using prohibited employees. The ongoing legal investigation took a toll on GCE's fortune, and the company eventually filed for Chapter 11 bankruptcy protection. According to court documents, GSA and Labor paid GCE $23.5 million in August 2014 to acquire the financial management system from the ailing contractor when it filed for bankruptcy, in order to maintain access to the government data hosted on GCE's cloud.

The Bankruptcy Court for the Eastern District of Virginia approved the settlement, which does not constitute an admission of civil liability. The $9 million payment will come out of GCE's Chapter 11 proceeding.

About the Author

Adam Mazmanian is executive editor of FCW.

Before joining the editing team, Mazmanian was an FCW staff writer covering Congress, government-wide technology policy and the Department of Veterans Affairs. Prior to joining FCW, Mazmanian was technology correspondent for National Journal and served in a variety of editorial roles at B2B news service SmartBrief. Mazmanian has contributed reviews and articles to the Washington Post, the Washington City Paper, Newsday, New York Press, Architect Magazine and other publications.

Click here for previous articles by Mazmanian. Connect with him on Twitter at @thisismaz.

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