Praetorian Shield to Pay $221K Over Fraudulent Certifications

Praetorian Shield to Pay $221K Over Fraudulent Certifications.

The U.S. Department of Justice has reached a $221,000 settlement with Praetorian Shield Inc., a defunct Delaware company, and its owners Grady and Ranya Baker, resolving allegations that the couple improperly obtained federal contracts by misrepresenting the company’s eligibility for small business programs.

According to federal prosecutors, between 2016 and 2023, the Bakers falsely claimed that Praetorian Shield qualified as both a Woman-Owned Small Business (WOSB) and a Service-Disabled Veteran-Owned Small Business (SDVOSB) – designations that carry preferential access to government contracts under federal set-aside rules.

Those claims, prosecutors allege, were part of a broader scheme to steer security contracts from the Department of Homeland Security (DHS) toward Paragon Systems Inc., a major federal security contractor that employed Grady Baker as a senior executive during the period in question.

“The Bakers’ conduct in fraudulently obtaining government small business contracts thwarts the purpose of the small business program, which is meant to support small and disadvantaged businesses,” said U.S. Attorney Kelly O. Hayes of the District of Maryland.

“This settlement demonstrates our office’s commitment to protecting the integrity of federal contracting programs and to holding accountable those who seek to gain an unfair advantage through deception.”

Allegations of Misrepresentation and Control

Praetorian Shield was presented to federal agencies as an independent, woman-owned and veteran-owned small business.

But in reality, prosecutors contend, the company was closely controlled by Grady Baker and other executives from Paragon, an arrangement that would have made it ineligible for the contracts it received.

As described in court filings, Grady Baker allegedly instructed his wife to incorporate the company under a variation of her name, using her middle and maiden names – names she did not customarily use in business or personal contexts.

This tactic was allegedly employed to help mask the couple’s connection to Paragon and to falsely qualify Praetorian for set-aside contracts.

Despite having no genuine operational independence, Praetorian obtained DHS contracts as a subcontractor to Paragon.

Prosecutors say the Bakers were aware the company did not meet eligibility requirements but moved forward with the scheme regardless.

Kickbacks to and from Executives

In addition to the misrepresentation claims, the settlement resolves alleged violations of the Anti-Kickback Act.

The government contends that Praetorian and the Bakers provided more than $188,000 in illicit payments to Paragon executives in connection with contract awards.

Further, Ranya Baker allegedly received $98,000 in kickbacks from another security subcontractor, Patronus Systems Inc., suggesting a wider pattern of improper financial relationships within the federal contracting space.

While the full value of the contracts and kickbacks tied to the scheme may have been significantly higher, the $221,000 settlement was shaped by what officials described as the Bakers’ current financial means.

In other words, the amount reflects what the government believes it can realistically recover.

Importantly, the settlement includes no admission of wrongdoing by the Bakers or Praetorian Shield.

Delaware has seen similar enforcement actions in recent years. In 2019, E.M. Photonics, Inc., a Delaware-based company, and its CEO agreed to pay $2.75 million to resolve allegations under the False Claims Act after allegedly inflating labor costs and duplicating charges on federal contracts.

Praetorian Shield to Pay $221K Over Fraudulent Certifications