Collective settlements against ADS and its executives resulted in nearly $37 million in settlements – the largest settlement ever secured in a small business fraud case

WASHINGTON–(BUSINESS WIRE)–In first paragraph, first sentence of release, the title of Luke M. Hillier should read: former CEO, former President and Founder (instead of CEO, President and Founder).

The corrected release reads:


Collective settlements against ADS and its executives resulted in nearly $37 million in settlements – the largest settlement ever secured in a small business fraud case

The national law firm of Baron & Budd today announced that the U.S. Department of Justice (DOJ) has secured more than $20 million in settlements to resolve a federal whistleblower lawsuit filed on behalf of its client against Virginia Beach-based defense contractor Atlantic Diving Supply’s (ADS) former CEO, former President and Founder, Luke M. Hillier, and ADS’ former General Counsel, Charles M. Salle. The lawsuit alleged Hillier and Salle each violated the federal False Claims Act (FCA) by illegally obtaining government contracts set aside for small businesses and businesses owned by minorities, women, and veterans.

The settlements announced today represent the culmination of a multi-year enforcement effort against ADS, its executives, and related entities. In 2017, the DOJ secured a settlement with ADS for $16 million related to the same conduct. In 2018, the DOJ secured settlements totaling $620,000 with MJL Enterprises, LLC; SEK Solutions, LLC; and Karda Systems, LLC—three of the businesses alleged to have participated in the fraud.

In total, the defendants have agreed to pay nearly $37 million—the largest recovery ever involving alleged small-business contracting fraud. Hillier’s settlement of $20 million is among the largest secured against an individual in the history of the FCA.

The case against Hillier and Salle was supported by guidance from former Deputy Attorney General Sally Yates in a 2015 memo which advocated for holding accountable not only corporations, but also the individuals directly involved in fraud.

“All too frequently in FCA cases, we see corporations consider fraud settlements as simply a cost of doing business. It’s very reassuring for us and our clients to see that the Department of Justice is serious about holding individuals accountable as well,” said Baron & Budd shareholder Andrew Miller. “These settlements should stand as a strong warning that executives will not be insulated from liability if they are involved in defrauding the federal government.”


Baron & Budd, P.C. is among the largest and most accomplished plaintiffs’ law firms in the country. With more than 40 years of experience, Baron & Budd has the expertise and resources to handle complex litigation throughout the United States. As a law firm that takes pride in remaining at the forefront of litigation, Baron & Budd has spearheaded many significant cases for hundreds of entities and thousands of individuals. Since the firm was founded in 1977, Baron & Budd has achieved substantial national acclaim for its work on cutting-edge litigation, trying hundreds of cases to verdict and settling tens of thousands of cases in areas of litigation as diverse as dangerous pharmaceuticals and defective medical devices, asbestos and mesothelioma, environmental contamination, fraudulent banking practices, motor vehicles, employment, and other consumer fraud issues.


Baron & Budd, P.C.

Monica Cordova