The Paragon lawsuit ended in a $52 million False Claims Act settlement announced by the U.S. Department of Justice on November 12, 2024. Paragon Systems Inc., one of the largest armed security contractors serving the federal government, resolved allegations that for more than a decade it used sham small businesses controlled by its own executives to win Department of Homeland Security contracts set aside for woman-owned and veteran-owned firms, and paid kickbacks to insiders through the arrangement.
How the Scheme Worked
The conduct dated back to at least 2010. Paragon was too large to bid on federal small business set-asides, so, according to the DOJ, former high-ranking Paragon officials recruited female relatives and friends to serve as figurehead owners of purported Woman-Owned Small Businesses and Service-Disabled Veteran-Owned Small Businesses. Those companies bid on DHS contracts, won them, then subcontracted essentially all of the actual security work back to Paragon.
Money moved in the other direction too. The DOJ alleged that the controlled small businesses funneled more than $11 million back to Paragon executives through over 300 payments disguised as consulting fees and routed through shell companies.
The Front Companies
Two entities sat at the center of the case: Athena Services International LLC and Patronus Systems Inc. A third, Praetorian Shield Inc., was added later.
Athena Services International, its joint venture Athena Joint Venture Services LLC, and owner Alisa Silverman agreed to a separate settlement of more than $1.6 million. The DOJ also alleged that Athena improperly obtained a Paycheck Protection Program loan during the pandemic that was fully forgiven based on false representations about the company’s compliance with PPP rules.
Patronus Systems and its owner, Mabel O’Quinn, have not settled. The United States filed a complaint in intervention against them in the District of Maryland, alleging that Patronus submitted nearly 700 false claims to DHS for protective security services, resulting in over $106 million in payments, and paid more than $4.6 million in kickbacks to Paragon executives through shell companies. That case remained unresolved as of mid-2025.
In May 2025, the DOJ announced a settlement with Praetorian Shield Inc. and its operators, Grady and Ranya Baker. Grady Baker had served as Paragon’s Vice President of Operations while running Praetorian day-to-day. Between 2016 and 2023, the Bakers falsely represented Praetorian as a woman-owned and veteran-owned small business to secure DHS contracts, and Ranya Baker incorporated the company using her maiden and middle names to conceal its connection to Paragon. The Bakers and Praetorian agreed to pay $221,000, an amount the DOJ said reflected their limited ability to pay.
Where the Case Came From
The lawsuit began as a whistleblower complaint filed in December 2021 by Todd Pattison, the CEO and President of MaxSent, an Annapolis-based security company that competes for the same federal contracts. Pattison sued under the False Claims Act’s qui tam provision, which lets private citizens sue on the government’s behalf and share in the recovery.
Pattison noticed the pattern around October 2018 after Patronus Systems Partners, a joint venture between Paragon and Patronus, won a Federal Protective Service contract for security officers in New Jersey. He investigated, concluded Paragon was using multiple proxy companies to bypass small business eligibility rules, and disclosed his findings to the government before filing suit in the U.S. District Court for the District of Maryland.
The DOJ intervened in August 2024. As part of the settlement, Pattison is set to receive more than $9 million from the Paragon recovery and roughly $280,000 from the Athena settlement.
Settlement Terms and What Remains Open
Paragon agreed to pay $52 million on a schedule running through 2025, and to cooperate with the DOJ’s continuing investigation of other parties and any related litigation. The settlement resolves allegations only; there has been no formal determination of liability.
No Paragon executive has been publicly charged with a crime in connection with the scheme. Every resolution so far has come through civil settlements under the False Claims Act and Anti-Kickback Act. The pending complaint against Patronus Systems and Mabel O’Quinn is the one unresolved piece of the litigation as of mid-2025.
Paragon’s parent company, the Swedish security conglomerate Securitas AB, acknowledged the settlement in a November 2024 press release, describing it as concluded and noting roughly $1 million in additional investigation-related costs. The available record does not indicate that Paragon has been debarred or lost eligibility for federal contracts, and the company continues to hold substantial DHS work, including a 2022 award worth up to $279 million for armed protective security officers in the Los Angeles area.