QUANTICO, Va. — Earlier this month, Air Force Office of Special Investigations Special Agents contributed to a federal investigation ending in a $13 million settlement with two defense and aerospace contractors accused of failing to protect sensitive government information, the Department of Justice announced.
The Nov. 3 settlement involved ILC Dover LP and ILC Astrospace LLC, both headquartered in Frederica, Delaware, resolves allegations that the companies knowingly submitted false claims for payment under federal contracts despite years of cybersecurity deficiencies.
The contracts supported the Department of the Army, Missile Defense Agency and NASA.
The case involved AFOSI’s Procurement Fraud Detachment (PF Det) 6, led by Special Agent in Charge Sotiria Nezi, with Special Agent Ryan Whipple currently serving as interim Special Agent in Charge. PF Det 6’s case agent was SA Shubha Dahal.
“What makes cybersecurity fraud cases particularly important is that the risk is not always visible,” Nezi said. “A contractor may keep working while the systems holding sensitive government information do not meet required security standards. Investigating those discrepancies reinforces the importance of accountability in federal contracting.”
According to the settlement agreement, the companies failed to fully implement required cybersecurity controls between Jan. 2018 and Oct. 2024.
The alleged deficiencies included inadequate security documentation, unaddressed system vulnerabilities and the use of a third-party cloud service provider without ensuring compliance with federal cybersecurity requirements.
The companies allegedly stored engineering, manufacturing and quality documentation, including controlled defense information, with the outside provider between Feb. 2023 and Oct. 2024, the Justice Dept. released.
The settlement also details warnings that preceded the resolution. In Nov. 2018 and Sept. 2024, third-party cybersecurity consultants informed ILC that dozens of required security controls had not been implemented.
The deficiencies would have resulted in assessment scores of negative 59 and 21, respectively, under the War Department’s cybersecurity assessment methodology, which uses a scale ranging from negative 203 to 110.
But, according to the agreement, the companies did not report those scores or the associated vulnerabilities to the War Department.
AFOSI participated alongside the Defense Criminal Investigative Service, Army Criminal Investigation Division, Naval Criminal Investigative Service, NASA Office of Inspector General and General Services Administration Office of Inspector General.
The Justice Department’s Civil Division and U.S. Attorney’s Office for the District of Delaware handled the settlement.
The case originated from a whistleblower lawsuit filed in Jan. 2025 by Philip Root, ILC’s former director of cybersecurity. Under the False Claims Act, private citizens may bring lawsuits alleging fraud against the government and receive a portion of any recovery.
Root will receive $2.35 million from the settlement. Of the $13 million payment, $6.5 million is designated as restitution. The agreement also includes separate payments for legal expenses and other claims.
“The settlement reflects the financial consequences contractors face when they fail to meet cybersecurity obligations tied to government contracts, even when no successful cyberattack or theft of information happened,” Whipple said.
Neither company admitted liability, and the settlement resolved allegations rather than a judicial finding of wrongdoing.
“Our investigations send a clear message that fraud involving [DAF] resources will not go unchecked,” said Special Agent Caroline Galinis, director of operations of AFOSI PF. “By identifying criminal misconduct, pursuing accountability and working with our partners to recover losses, AFOSI PF is protecting the integrity of the acquisition process and the capabilities our warfighters need.”
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