Paragon Systems, a Virginia-based security contractor, and a subsidiary will pay nearly $54 million to resolve allegations that its corporate executives–including its compliance manager–conspired to win Department of Homeland Security (DHS) contracts by creating fraudulent small business front companies.
DHS had set aside certain contracts to provide security services at government buildings for women-owned small businesses and service-disabled veteran owned small businesses. Paragon created numerous small front companies, controlled by female friends and relatives of Paragon executives, to win these small business set-aside contracts, the Department of Justice alleged in a press release Tuesday. The small businesses made more than $11 million in payments to those Paragon executives in the form of purported “consulting services.”
