Former NSA Subcontractor, Kyle Duran Smego, Pleads Guilty To Submitting False Claims For Hours Worked On Government Contracts

Caused NSA to Overpay More than $220,000

Baltimore, MD (STL.News) – Kyle Duran Smego, age 40, of Raleigh, North Carolina, pleaded guilty on July 2, 2019, to submitting false claims to the United States, specifically for inflating the number of hours he claimed to have worked on two government contracts.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur and Robert P. Storch, Inspector General of the National Security Agency.

The National Security Agency (NSA) is a component of the United States Department of Defense.  During the period from February 2016 to present, the NSA had two ongoing contracts with an outside company (Contractor A).  Each of these contracts required Contractor A to supply information technology (IT) services to the NSA.  Contractor A subcontracted with Subcontractors 1 and 2, respectively, to provide software engineers and developers needed to carry out its obligations under each contract.

According to his plea agreement, from February 2016 through May 2018, Kyle Duran Smego was successively employed on a full-time basis by Subcontractors 1 and 2 to work as a software engineer/front end developer on the two separate contracts held by Contractor A.  Because the subject matter of these contracts involved classified information, all of the work had to be performed at secure, access-controlled locations.  Smego was therefore required to be physically present at his assigned duty locations to do his work.

Between February 2016 and November 2017, Smego reported to Subcontractor 1 that he had worked 3,289 hours on their contract.  Between November 2017 and May 2018, Smego reported to Subcontractor 2 that he had worked 797.5 hours on their contract.  A subsequent review by the NSA of key card and timecard information demonstrated that Smego was not actually present at his assigned duty stations for at least 1,326 of the 3,289 hours he had reported to Subcontractor 1 (40.3%) and 375 of the 797.5 hours he had reported to Subcontractor 2 (47%).  In addition to overstating the number of hours he had worked, the time-sheets that Smego submitted to Subcontractors 1 and 2 included entries for 119 separate days in which Smego represented that he had worked an average of 8 hours when, in fact, he had not worked at all on those days.

All of the hours that were falsely reported by Smego were subsequently billed by the subcontractors to Contractor A, and were in turn billed by Contractor A to, and paid by, NSA.  Based upon the false billing records submitted by Smego, the NSA overpaid a total of $220,379.42 to Contractor A.  Contractor A, in turn, paid most of those funds over to Subcontractors 1 and 2, who ultimately paid Smego $115,110 for work he had not performed.

As part of his plea agreement, Smego will be required to pay restitution and to forfeit any assets derived from or traceable to the offense.

Smego faces a maximum sentence of five years in prison. U.S. District Judge Richard D. Bennett has scheduled sentencing for October 3, 2019 at 3:00 p.m.