The Macalan Group, Inc. Agrees To Resolve Overcharging Allegations

DENVER – The Macalan Group, Inc., formerly known as NEK Advanced Securities Inc. (NEK), a security contractor headquartered in Colorado Springs, Colorado, has agreed to resolve allegations that it submitted false claims in connection with a contract with the Joint Improvised Explosive Device Defeat Organization (JIEDDO), U.S. Attorney John Walsh announced on behalf of the Justice Department and its investigative partners.

NEK’s contract with JIEDDO required it to develop and deploy teams of specialized personnel to Iraq and Afghanistan to combat improvised explosive devices.  The government alleged that NEK submitted false invoices for payment in connection with this contract that claimed excessive or unallowable costs.  To resolve these allegations, NEK has paid the United States $2.08 million, and will also relinquish an outstanding invoice for $744,969, and turn over numerous weapons and accessories acquired under the contract. 

“No government contract is more important than one that supports the security efforts of our nation overseas,” said U.S. Attorney John Walsh.  “When a contractor fails to bill by the contract rules set up to protect American taxpayers, our office will diligently and aggressively seek to recover any losses, as this case demonstrates.”

“This settlement demonstrates our commitment to pursue contractors who fail to accurately bill the government,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “The Justice Department will continue to ensure that those who do business with the government do so honestly and fairly and uphold the integrity of our public contracting process.”

“We are very pleased with today’s settlement with over two million dollars back to the U.S. Government,” said Frank Robey, Director of the United States Army Criminal Investigation Command’s Major Procurement Fraud Unit.  “Our special agents have worked tirelessly on this case, along with our partners in Federal law enforcement and the Department of Justice, and will continue to do so as we continue to scrutinize and monitor contracts affecting the U.S. Army.”

“The settlement in this investigation is the result of a highly successful joint effort by the Defense Criminal Investigative Service (DCIS) and our law enforcement partners from the U.S. Army Criminal Investigations Command and the Department of Justice, to include support provided by the Defense Contract Audit Agency,” said Janice M. Flores, Special Agent in Charge of the DCIS Southwest Field Office.  “This settlement highlights the Federal Government's continuing resolve to recover losses to the American taxpayer when a contractor has claimed money to which it was not entitled.  The United States must be able to count upon Government contractors to seek payment only for services performed or material provided, in conformance with their contractual obligations.”

The United States Attorney’s Office is grateful for the hard work of the investigative partners that produced today’s result, including the Civil Division, Commercial Litigation Branch; the Army Criminal Investigation Command Major Procurement Fraud Unit; the Defense Criminal Investigative Service; the Defense Contract Audit Agency; and, the Contract Integrity Center, Office of General Counsel, Defense Contract Management Agency.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

Assistant U.S.  Attorney J. Chris Larson and Department of Justice Trial Attorney Benjamin Wei handled this matter on behalf of the United States.

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