A pair of Canadian-owned companies have agreed to pay nearly a quarter million dollars in fines to settle claims they defrauded a program funded by the U.S. Air Force and U.S. Navy.
U.S. Attorney Michael DiGiacomo said Advanced Global Services, Ltd. (AGS), Paradigm Shift Technologies (PST), and Gennady Yumshtyk (collectively, the defendants) have agreed to pay $223,618 to resolve allegations, arising under the False Claims Act, that they submitted false claims in connection with a Small Business Innovation Research (SBIR) program award funded by the United States Air Force and Navy.
In 2019, AGS obtained an SBIR award to develop certain gun barrel coating technology through the Air Force. To obtain the award, AGS and its president, Yumshtyk, certified, among other things, that AGS would conduct all research and development in connection with the award and that it would do so in the United States.
AGS, which was located in Orchard Park, did not, in fact, perform work under the award, according to U.S. government officials. Rather, PST, which is located in Toronto performed the SBIR award work out of its Canadian facility.
Accordingly, the United States contends that the companies were not eligible to participate, and receive funding through, the SBIR program.
“This office is committed to holding accountable companies and individuals that misrepresent themselves so that they can participate in important government programs, like SBIR,” DiGiacomo said.
“Protecting the integrity of the federal procurement process is a top priority for the Air Force Office of Special Investigations,” added Special Agent-in-Charge Sandy Nezi, Air Force Office of Special Investigations. “When contractors misrepresent their eligibility and location of work to secure taxpayer funds, they undermine programs designed to support genuine American small businesses. We will continue to work with our partners to aggressively investigate and hold accountable those who attempt to defraud the Department of the Air Force.”
The civil settlement resolves allegations brought by the U.S. in a civil complaint filed on Nov. 24 in the U.S. District Court for the Western District of New York.
The case was investigated at the direction of Special Agent Sandy Nezi, Air Force Office of Special Investigations, Office of Procurement Fraud; the Naval Criminal Investigative Service, Economic Crimes Field Office; and Assistant U.S. Attorney David M. Coriell and Investigator Peggy McFarland of the U.S. Attorney’s Office for the Western District of New York.