Sierra Nevada Company LLC, a Sparks, Nevada-based defense contractor, has agreed to pay $7.75 million to settle False Claims Act allegations brought by the U.S. Department of Justice and handled by the U.S. Attorney’s Office for the Eastern District of Virginia.
According to the government, SNC employed Michael Henry, an active Department of Defense official serving within Joint Staff/J6, as a paid outside consultant from July 2019 through June 2020. During that same period, Henry is alleged to have participated in the award of three government contracts to SNC, a direct organizational conflict of interest prohibited under the Federal Acquisition Regulation. The government further alleged that SNC made material false statements and submitted false certifications to conceal the arrangement from federal contracting authorities.
The case gains an additional dimension from the parallel criminal proceeding against Henry himself: in 2025, he pleaded guilty to a federal charge of engaging in acts affecting a personal financial interest, a criminal statute that bars executive branch employees from participating personally in government matters in which they hold a financial stake. That conviction, combined with the civil FCA resolution, reflects a coordinated enforcement approach involving the DOJ, the U.S. Attorney’s Office for the Eastern District of Virginia, and the Department of Defense Inspector General.
The alleged scheme illustrates how organizational conflict of interest violations can give rise to FCA liability well beyond the immediate financial benefit a contractor receives. When a company knowingly employs a government official who retains decision-making authority over contracts awarded to that company, and when the company actively conceals that relationship through false certifications, each tainted contract claim submitted to the government can become the basis for FCA exposure.