Atlantic Diving Supply Scams the Military

A Virginia Beach (VA) company that supplies diving equipment to the U.S. military's search-and-rescue operations has agreed to pay $16 million to satisfy charges that it fraudulently obtained government contracts.

ADS -- Atlantic Diving Supply -- which held $1 billion in federal contracts last year, began 20 years ago as little more than a typical dive shop. Operating out of a trailer behind Lynnhaven Dive Center Diving Supply, it received a contract to outfit Navy SEALs with wetsuits. By 2014, the company employed around 400 people.

To achieve the settlement, the Justice Department said ADS took advantage of programs to help small business despite its size by relying on an elaborate network of smaller companies. The lawsuit was enabled by an unnamed whistleblower, who is due to receive around $2.9 million as part of the deal.