Booz Allen pays $15.8M to settle fraud allegations tied to military contracts

Booz Allen Hamilton has agreed to pay $15.875 million to settle allegations that its subsidiary, Booz Allen Hamilton Engineering Services (BES), violated the False Claims Act. The settlement follows claims that BES managers John G. Hancock and Karen K. Paulsen collaborated with Air Force employee Keith A. Seguin and subcontractor David J. Bolduc Jr. of QuantaDyn Corp. to win GSA task orders for military training simulators using confidential information.

The Department of Justice alleges the scheme, spanning 2007–2018, involved $2.3 million in bribes to Seguin, who provided government contract details to benefit BES and QuantaDyn. This allowed them to secure 37 GSA task orders totaling millions. DOJ noted that Hancock, Paulsen, Seguin, and Bolduc have already faced criminal charges, with sentences ranging from probation to 188 months in prison.

Booz Allen emphasized the fraudulent activities occurred before its 2012 acquisition of BES from ARINC. The company denied wrongdoing, claiming employees concealed the scheme and reiterated its cooperation with authorities.

This settlement follows Booz Allen’s $377 million payment in 2021 to resolve overbilling allegations under indirect cost contracts. The case highlights ongoing scrutiny of contractor practices in federal acquisitions.