TECHNOLOGY, SAIC, Others Pay $22.7 Million to Resolve Contracting Case

Science Applications International (SAIC), a subcontractor and two former government employees will pay nearly US$22.7 million to resolve allegations that they rigged bids for a $3.2 billion supercomputing contract with the U.S. General Services Administration, the U.S. Department of Justice announced Thursday.
Whistleblower David Magee, a former computer scientist at the U.S. Naval Oceanographic Major Shared Resource Center in Mississippi, alleged that two top-ranking employees at the center helped steer the contract to SAIC and subcontractor Applied Enterprise Solutions, owned by a former government employee.
SAIC will pay $20.4 million to resolve Magee's False Claims Act lawsuit, filed in U.S. District Court for the Southern District of Mississippi, the DOJ said in a press release. Applied Enterprise Solutions and its CEO, Dale Galloway, will pay nearly $2.2 million, and former government employees Stephen Adamec and Robert Knesel will pay $110,000, the DOJ said.
SAIC is confident its conduct was "lawful and in keeping with standard industry practice," a spokeswoman said. "But in the end the company decided it was more important to focus attention on managing the company rather than incurring the risks, costs and distractions of continued litigation."
Galloway did not return an email seeking comment.
The Mississippi center provides high-performance computing services for the U.S. Department of Defense, according to court documents. The contract, in which SAIC and Applied Enterprise Solutions teamed with Lockheed Martin, was to provide technology support services for the National Center for Critical Information Processing and Storage at the Mississippi center, the DOJ said.
SAIC was paid $116 million under the contract, the DOJ said. The DOJ joined the lawsuit against all the defendants except Lockheed Martin shortly after Magee filed the case. Lockheed Martin has previously settled the case for $2 million.
Adamec is the former director of the Mississippi center, while Knesel was deputy director, according to court documents. Magee's lawsuit alleged that the two of them worked with Galloway on the GSA contract. Galloway, former director of the DOD's Space and Naval Warfare Systems Command Information Technology Center, resigned in June 2003 and started Applied Enterprise Solutions with his wife, according to court documents.
Adamec and Knesel shared nonpublic, advance procurement information with the SAIC team, the lawsuit alleged. The two former government employees shared information with the SAIC team before providing that information to other bidders, and they wrote a contract that favored the SAIC team, the DOJ and Magee alleged.
Whistleblowers in False Claim Act contracting lawsuits can share in the money recovered by the DOJ.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service.

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TECHNOLOGY, iPhone 5 MIA as 10 Million Samsung Galaxy S IIs Ship

Samsung has managed to ship more than 10 million Galaxy S II Android smartphones even before hitting the U.S. market, while Apple’s iPhone 5 remains just a rumor. Samsung released the phone in global markets five months ago, but its arrival in the U.S. is expected to clash with the launch of the iPhone 5.
The Galaxy S II is the fastest-selling phone in Samsung’s history, the company says. Shipments are impressive for any Android phone manufacturer, although not exactly in the same league as the iPhone 4, a year-old phone which sold more than 20 million units in the second quarter of this year alone. It’s also worth noting that Samsung’s numbers do not reflect how many customers actually bought the S II model.
Samsung’s Galaxy S II is a svelte phone (although not thinner than the iPhone 4) with a 4.3-inch display, a dual-core processor, an 8-megapixel camera to capture 1080p HD video, and a 2-megapixel camera on the front for video calling. The U.S. version of the phone will have slight variations to the specs. Sprint’s S II, available now, features a slightly larger 4.52-inch screen (as does the T-Mobile version), while the AT&T version, due October 2, does not depart form the standard specs.

Speculation grew all summer about Apple’s iPhone 5, with conflicting reports of a new model with a larger screen, a model similar to the iPhone 4 with improved specs, or both. The only consistent expectation is the use of the dual-core A5 processor (from the iPad 2) and a better, possibly 8-megapixel, camera.
But Apple is keeping everyone guessing over when the iPhone 5 will arrive. The latest hints emerged from reportedly manufacturing some 22 million new iPhones to sell by the end of this year.

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TECHNOLOGY, US Agencies Returning $55 Million From AdSurfDaily Operation

Two U.S. government agencies have begun to return US$55 million in forfeited funds from a Web-based operation accused by investigators of being a massive Ponzi scheme, the U.S. Department of Justice and U.S. Secret Service announced Monday.
The two agencies are returning the funds to about 8,400 people who joined AdSurfDaily, an operation the agencies accused of being a Ponzi scheme disguised as an online advertising company. AdSurfDaily, through YouTube videos and other promotional efforts, and company founder Thomas "Andy" Bowdoin Jr. promised to pay investors for visiting each other's websites, according to court documents.
AdSurfDaily operated at various websites, including Adsurfdaily.com, Adcashgenerator.com and Lafuentedinero.com, the DOJ said.
"We are putting $55 million back into the pockets of innocent victims of this online Ponzi scheme," said Ronald Machen Jr., U.S. attorney for the District of Columbia, in a statement. "As we did in this case, we will continue to work with our law enforcement partners to recover every penny we can find for victims of financial fraud."
Bowdoin, indicted in November 2010, is facing five counts of wire fraud, one count of securities fraud, and one count of unlawful sale of unregistered securities in U.S. District Court for the District of Columbia. Bowdoin's operation, in business from about September 2006 to August 2008, collected about $110 million from investors, and paid out $31 million to early members, with 98 percent of the money coming from other members, according to the indictment.
Bowdoin, of Quincy, Florida, has pleaded not guilty and is awaiting trial.
Mike McDonnell, a lawyer for Bowdoin, called the DOJ's press release announcing the repayment of funds a "gross distortion of the facts."
There were no victims, said McDonnell, with McDonnell Trial Law and Dispute Resolution in Naples, Florida. "Not a single person lost a dime until the government shut down the business," he said. "These customers bought advertising on the 'Net. They were not investors."
AdSurfDaily was not a Ponzi scheme, because it offered no guarantees, McDonnell said. "The business had independent income," he said. "The business model ensured that the business remained viable since the payouts were based on a function of revenue and advertiser efforts."
In August 2008, the U.S. Attorney's Office for the District of Columbia seized more than $65 million from bank accounts holding AdSurfDaily members' money, the indictment said. Also seized were property, luxury vehicles and watercraft, the DOJ said.
AdSurfDaily investors looking to recover money should call 1-800-644-1535 or mail Basizette Stribling, victim witness assistant, Re: AdSurfDaily, United States Attorney's Office for the District of Columbia, 555 Fourth St. NW, Washington, D.C. 20530.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service.

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TECHNOLOGY, Tumblr includes $ 85 million investment round

Fast growing blogging platform, the Tumblr an investment round closed was, attracted to the new venture capitalists, and brought in $ 85 million.
The investment round led Greylock Partners and insight venture partners. The Chernin group and Richard Branson also investing in the blogging society of New York for the first time. New investments made, spark capital and Union Square Ventures, Sequoia Capital.
You can set up a microblog Tumblr content, including multimedia, browser, e-Mail, desktop or Smartphone. One of the key features is "Reblogging," users can quickly share posts on Tumblr. The service is often compared with WordPress.com, allows users to create a blog for free.
"In this year alone we have risen from 2 [billions] to 13 billion pageviews per month, with enormous international adoption." Mobile pageviews have increased 17 times during this period. And the 30 million blogs on Tumblr now generate more than 40 million posts a day, passing Tumblr founder David Karp in an e-Mail statement said 10 billion posts two weeks ago. He added that Tumblr additional investments continue to scale the blogging platform and focus on the further development of the services use.
In contrast, WordPress supports more than 59 million blogs around the world, of which about half to a wordpress.com domain be hosted. 299 Million people view more than 2.5 million pages each month, according to their stats page.
Tumblr of fast-growing popularity is the the main reason the Greylock Partners, invested in accordance with its company blog.
"In the course of the last year or so, it's practically exploded on the scene-it seems that you see each piece of interesting content and expression today has been posted to someone's Tumblr." The numbers that sichern-- last month 30 million blogs on Tumblr generated 13 billion page views, "said John Lilly, partner at Greylock Partners and former CEO of Mozilla, on the company blog." Greylock invested in Facebook and LinkedIn.
Deven Parekh, Managing Director, insight venture partners, said that Tumblr is a company, that the social landscape around the world changed. "We are pleased, a part of the future of the company and Tumblr to our list of investments which include, how Twitter and Flipboard, the social paradigm on the Web fundamentally change."

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