AiNET Corp. and Deepak Jain Agree to Pay $1.8M to Resolve Allegations of Submitting False Claims to the U.S. Securities and Exchange Commission for Data Center Services

AiNET Corp. and its former Chief Executive Officer Deepak Jain have agreed to pay $1,800,000 to resolve allegations that they violated the False Claims Act by knowingly submitting false claims for data center services provided under a contract with the U.S. Securities and Exchange Commission (SEC). AiNET operates a data center in Beltsville, Maryland.

"Those who do business with the government must do so fairly and honestly," said Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division. "We will continue to pursue contractors that knowingly fail to provide required services to federal agencies."

"Protecting taxpayer dollars is an OIG priority," said SEC Inspector General Kevin Muhlendorf. "The SEC OIG's dedicated team of investigators and auditors works tirelessly to hold contractors accountable, and we appreciate our continued partnership with the Department of Justice in that shared endeavor."

The settlement resolves allegations that AiNET and Deepak Jain fraudulently induced the SEC to enter the contract by falsely certifying that the AiNET data center met at least Tier III standards as defined by the Telecommunications Industry Association (TIA) Standards for Data Centers, TIA 942, and as required by the SEC contract. The United States alleged that the AiNET data center failed to comply with Tier III standards and that AiNet and Jain falsely certified to the SEC that experts from an entity called UpTime Council had inspected the data center and determined it was Tier IV, as defined by TIA 942. The United States alleged that these certifications were false because UpTime Council was not an operating company and never inspected the AiNET data center.

This year the Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration's war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. The Civil Division's FCA enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. FCA matters will continue to be on the forefront of the battle against fraud, and the Civil Division's FCA work will support and advance the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department's Civil Division, Commercial Litigation Branch, Fraud Section, and the SEC, Office of the Inspector General. Senior Trial Attorney Greg Pearson of the Fraud Section handled the matter.

The claims resolved by the settlement are allegations only and there has been no determination of liability.