NASA Contractor’s Service-Disabled Veteran Owned Small Business Fraud Uncovered

Lydia Demski, the owner and founder of several companies, agreed to pay $800,000 to the U.S. to resolve False Claims Act allegations that a company she owned fraudulently obtained a service-disabled veteran-owned small-business (SD VOSB) contract to refurbish equipment at a NASA facility in Ohio.  Demski who is not a service-disabled veteran, set up a company called Deerpath International, and certified that it was owned and operated by a service-disabled veteran as required under the SDVOSB requirements in order to obtain the contract.  In reality, Demski funneled the work to Deerpath, Corp., another corporation she owned.

The government’s discovery of Demski’s fraud was initiated by Greg Fones, a former employee of Demski who filed suit against her under the qui tam provisions of the False Claims Act.  Fones will receive $140,000 of the settlement for uncovering her scheme.

For more information see:  http://www.justice.gov/opa/pr/2011/September/11-civ-1226.html