Feds reach $2.75M settlement over alleged contract fraud

(AP) — A Delaware technology company and its chief executive have agreed to pay $2.75 million to settle allegations of fraudulent conduct involving federal contracts.

Authorities alleged that Newark-based E.M. Photonics and CEO Eric Kelmelis violated the False Claims Act over a five-year period starting in 2009 by seeking disbursements for falsified labor costs and duplicative work in order to maximize charges to the contracts.

The contracts involved the Navy, Air Force, NASA, Department of Energy and the Defense Advanced Research Projects Agency.

Under the terms of a civil settlement signed in December, Kelmelis and the company must pay equal amounts of $1.375 million. Neither admitted liability or wrongdoing.

An attorney for EMP said the company is proud of it work for the government and can now move forward without protracted litigation.

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