Booz Allen agrees to pay $15.9M settlement over subcontractor’s fraud scheme
Former executives at QuantaDyn, an Air Force official and two former Booz Allen Hamilton program managers ran a decade-long conspiracy to influence contract awards.
A decade-long bribery and fraud scheme orchestrated by a Booz Allen Hamilton subcontractor has resulted in multiple criminal convictions, which has led the company to agree on a $15.9 million settlement for alleged violations of the False Claims Act.
The case goes back a decade and involves Booz Allen Engineering Services, a business the firm formed in 2012 when it acquired ARINC.
Executives at QuantaDyn, a Booz Allen subcontractor, paid bribes to an Air Force employee for inside information and to influence award decisions. Two Booz Allen employees were also involved.
In settling with Booz Allen, the Justice Department is not claiming any liability on the part of the company.
But the two former Booz Allen employees, the QuantaDyn executives and the Air Force official have all since been criminally prosecuted.
The group operated a scheme between 2007 and 2018 that involved sharing contract and budget information, a competitor’s bid and proposal information, and source selection information.
The goal was to funnel awards to Booz Allen Engineering Services, which would then award work to QuantaDyn involving a contract for training simulators for the Air Force.
Justice said those actions, led by QuantaDyn, caused Booz Allen to submit false invoices to the U.S. government.
“Booz Allen raised concerns to the government prior to the investigation and subsequently fully cooperated in resolving the matter,” a company spokesperson said. “There are no findings or admissions of wrongdoing on the part of Booz Allen.”
QuantaDyn was criminally prosecuted and agreed to pay restitution of $37.8 million in 2020. QuantaDyn also agreed to a criminal penalty of $6.3 million and forfeiture of $7.1 million.
William Dunn Jr., QuantaDyn's chief executive, agreed to pay $500,000 to resolve his personal False Claims Act Liability.
The other defendants, including the former Booz Allen employees, were sentenced in 2023.
QuantaDyn executive David Bolduc Jr. was sentenced to 10 years in prison, as well as $37.8 million in restitution and forfeiture of property and $8.8 million.
Bolduc was accused of paying $2.4 million in bribes to Keith Seguin, a civilian Air Force employee. In return, Seguin directed contracts to QuantaDyn.
Seguin was sentenced in 2023 to over 15 years in prison for tax evasion and wire fraud. He also was ordered to pay $736,618 in restitution to the IRS and $38.7 million to the Air Force.
Booz Allen Engineering Services program manager John Hancock was sentenced to 40 months in prison for conspiracy to commit wire fraud and was ordered to pay $23.8 million in restitution.
Karen Paulsen, another program manager, received five years of probation with six months home confinement and 100 hours of community service during each year of her probation. She also must pay $8 million in restitution.
Hancock and Paulsen worked with Seguin to manipulate award amounts and winners.
Rubens Wilson Fiuza Lima, a friend of Seguin's received 27 months in prison. Lima received that sentence because he used his business, Impex Import Export Inc. to help Seguin launder the money.
Seguin’s alleged scheme lasted over 10 years, according to Justice.