Morse Corp Inc., a Massachusetts-based defense contractor, has agreed to pay $4.6 million to resolve allegations of cybersecurity fraud under the False Claims Act. The U.S. Department of Justice announced the settlement, claiming that the company misrepresented its compliance with federal cybersecurity standards while working on contracts with the Departments of the Army and Air Force.
The case began in January 2023 when a whistleblower, Kevin Berich, filed a qui tam lawsuit against Morse Corp under the False Claims Act. The DOJ joined the case in March 2023, accusing the company of violating the Defense Federal Acquisition Regulation Supplement (DFARS) clauses. These regulations mandate that contractors adhere to the cybersecurity standards outlined in the National Institute of Standards and Technology (NIST) Special Publication 800-171.
The DOJ’s investigation revealed that from January 2018 to September 2022, Morse Corp used a third-party service to host its emails without ensuring compliance with the FedRAMP Moderate baseline—a critical cybersecurity requirement for handling covered defense information. The company also failed to implement the required cybersecurity controls from NIST SP 800-171, which protect controlled unclassified information from unauthorized access.
According to the settlement agreement, Morse Corp submitted a misleading score of 104 on its cybersecurity...
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