Qui tam news stories

Defense contractor fraud

There are many ways that a defense contractor can defraud the government. For instance, it could charge time it spends working on a commercial contract to a government contract, or it could build products for the government using cheaper products that the government hasn’t authorized and billing the government for the more expensive parts.

Here is a list of articles about some of the qui tam cases brought against defense contractors by attorneys Phillips & Cohen.

• Northrop Grumman
• Teledyne Inc.
• General Electric Co. Inc.
• Singer Co.
• Allegheny Teledyne Inc.
• FMC Corp.
• Hughes Aircraft
• The Boeing Co.

Northrop Grumman: Northrop Grumman paid $111.2 million to the federal government to settle a whistleblower lawsuit brought by Phillips & Cohen alleging that TRW Inc., which it acquired, billed the government for work done on non-government contracts and padded in other ways bills submitted to the government under space and technology contracts.

• “Northrop to settle federal lawsuit; firm to pay $111.2 million to resolve overcharge claim,” Andy Pasztor and Anne Marie Squeo, The Wall Street Journal, 6/9/03.
• “Northrop to pay $111 million to settle suit; subsidiary TRW allegedly overcharged U.S. on 1990s space project work,” Anitha Reddy, The Washington Post, 6/10/03.
• “Northrop to pay $111 million in TRW suit,” Peter Pae, Los Angeles Times, 6/10/03.
• “Whistleblower gets $27 million from company,” James Bernstein, Newsday, 6/10/03.
• “Northrop settles federal TRW case; will pay $111m to end suit vs. unit,” Associated Press, Boston Globe, 6/10/03.
• “Government joins whistleblower suit charging TRW with accounting fraud,” Federal Contracts Report, 2/23/98.
• “Justice joins lawsuit accusing TRW of fraud,” Tim Smart, The Washington Post, 2/20/98.
• “Civil fraud lawsuit against TRW Inc. over space contracts is joined by U.S.,” Andy Pasztor, The Wall Street Journal, 2/20/98.
• “Justice Dept. to join suit against TRW,” Andrew Pollack, The New York Times, 2/20/98.
• “Whistle-blower’s lawsuit alleges TRW unit defrauded government,” Elizabeth Douglass,   Los Angeles Times, 2/20/98.
• “Lawsuit accuses TRW of fraud,” Marcus Gleisser, Plain Dealer, 2/20/98.
• “Suit charges TRW defrauded government on space contracts,” Vago Muradian, Defense Daily, 2/20/98.

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Teledyne Inc.:Teledyne paid more than $115 million to settle two qui tam lawsuits brought by whistleblowers represented by Phillips & Cohen attorneys. One qui tam lawsuit said Teledyne’s Relays Division had falsely certified test results on certain sensitive electromagnetic parts that are used in weapons systems. A separate whistleblower lawsuit accused the company of padding estimates on sole source contracts.

• “Teledyne to pay $112 million in two whistle‑blower suits,” Ralph Vartabedian, Los Angeles Times, 4/22/94.
•   “Pentagon's contract ban for Teledyne; relays unit admits to faking test results,” New York Times, 4/14/93.
• "Teledyne pleads guilty to charges it falsified tests," Jeff Cole, The Wall Street  Journal, 11/10/92.
• “Teledyne, official accused of fraud; settlement offered,” Ron Russell, Los Angeles Times, 10/3/92.
• "Maker is accused of faulty tests on parts for missiles and aircraft," Richard Stevenson, The New York Times, 4/23/92.
• “U.S. joins suit alleging Teledyne falsified tests,” Henry Weinstein, Los Angeles Times, 4/23/92.
• “U.S. joins suit over Teledyne's testing results," Jeff Cole, The Wall Street Journal, 4/23/92.
• "Justice Dept. joins fraud suit against Teledyne," Steven Pearlstein, The Washington Post, 4/23/92.
• “Justice Dept. joins Teledyne suit filed by whistle‑blower,” Ralph Vartabedian, Los Angeles Times, 11/29/90.
• "Teledyne target of whistle‑blower suit," Russ Britt, The Wall Street Journal, 10/29/90.
• "U.S. joins lawsuit by whistle‑blower against Teledyne," The Wall Street Journal, 10/29/90.

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General Electric Co. Inc.: GE paid $59.5 million to settle a whistleblower lawsuit that alleged GE executives and an Israeli general conspired to divert U.S. military aid money intended for the Israeli Air Force.

• “Portrait of a whistleblower,” Liz Doup, The Miami Herald, 1/17/93.
• "GE whistleblower receives record $13.4 million award," John Mintz, The Washington Post, 12/5/92.
• "Whistleblower in GE scandal gets $13 million," Jonathan Peterson, Los Angeles Times, 12/5/92.
• "GE whistleblower is awarded $13.4 million," Calvin Sims, The New York Times, 12/5/92.
• "Whistleblower gets $13 million award," Gary Rhodes, The Washington Post, 12/5/92.
• “Federal judge awards ex-GE staffer record amount in whistleblower case,” Amal Kumar Naj, The Wall Street Journal, 12/7/92.
• “GE guilty plea in U.S. aid to Israel,” Richard W. Stevenson, The New York Times, 7/23/92.
• “General Electric pleads guilty, pays $69 million to settle whistleblower suit,” Amal Kumar Naj, The Wall Street Journal, 7/23/92.
• “GE’s drive to purge fraud is hampered by worker’s mistrust,” Amal Kumar Naj, The Wall Street Journal, 7/23/92.
• "GE Threatens to Fire, Sue Worker Who Told of Israeli Scheme," Steven Pearlstein, The Washington Post, 3/18/92.
• "U.S. accuses GE of fraud in Israeli deal," Richard Stevenson, The New York Times, 8/15/91.
• "U.S. joins suit against General Electric officials," Amal Kumar Naj, The Wall Street Journal, 8/15/91.
• "U.S. broadens fraud action against GE," Amal Kumar Naj, The Wall Street Journal, 3/17/91.

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Singer Co.: Singer and CAE Inc. paid $50 million to settle a whistleblower lawsuit that charged Singer’s Link Flight Simulation Division (later sold to CAE) routinely and systematically submitted false cost and pricing data to the Department of Defense on sole-source fixed-price, negotiated contracts.

• “Whistleblower collects $7.5 million for his tip,” Richard W. Stevenson, The New York Times, 7/19/92.
• “U.S. judge orders $7.5 million award to whistleblower,” Richard W. Stevenson, The New York Times, 7/15/92.
• “Fraud suit is settled for $55.5 million,” Henry Weinstein, Los Angeles Times, 7/15/92.
• “Singer Corp. successor firm is expected to be charged in Pentagon fraud case,” Andy Pasztor, The Wall Street Journal, 7/9/92.
• “Singer case whistleblower says decision was difficult,” James Hirsch, The New York Times, 3/16/89.
• “U.S. sues singer on contracts,” Jeff Gerth, The New York Times, 3/15/89.
• “U.S. joins lawsuit against Singer Co. over job claims,” Laurie P. Cohen, The Wall Street Journal, 3/15/89.

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Allegheny Teledyne Inc.: Allegheny Teledyne  paid $13.95 million to settle a qui tam case involving issues as to whether Teledyne Systems Co., a corporate predecessor, was properly allocating between the government and commercial customers indirect costs relating to calibration services.

• “Teledyne units settle ’95 suit for $14 million,” Karen Kaplan, Los Angeles Times, 11/13/97.
• “Teledyne ponies up, settles suit,” Len Boselovic, Pittsburgh Post-Gazette, 11/13/97.
• “Allegheny Teledyne to pay up,” Deborah Adamson, Daily News, 11/13/97.

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FMC Corp.:The company agreed to pay more than $13 million to settle a whistleblower lawsuit alleging that it had inflated its research costs under a Pentagon contract to build the Bradley combat vehicle.

• “Whistleblowing hits chord; former FMC Corp. employee to receive $2.86 million in settlement,” Vincent J. Schodolski, Chicago Tribune, 10/23/96.
• “FMC to pay $13m settlement,” Barbara Starr, Jane’s Defence Weekly, 10/16/96.
• “FMC to pay $13 million in whistleblower settlement,” Los Angeles Times, 10/9/96.
• “FMC Corp. settles government’s suit on overpricing,” Andy Pasztor, The Wall Street Journal, 10/9/96.
• “FMC to pay U.S. in Army contract dispute,” New York Times, 10/9/96.
• “Defense contractor FMC to pay U.S. $13 million,” Seth Rosenfeld, San Francisco Examiner, 10/9/96.
• “S.J. defense firm to pay $13 million,” Harriet Chiang, San Francisco Chronicle, 10/9/96.
• “FMC pays $13 million to settle U.S. claims,” Chicago Sun-Times, 10/9/96.
• “FMC to pay U.S. over suit,” Janet Rae-Dupree, San Jose Mercury News, 10/9/96.

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Hughes Aircraft: Hughes paid $4.5 million to settle a whistleblower lawsuit accusing it of falsifying quality-control tests of electronic parts used in various weapons.

• “Hughes Aircraft pays $4.5 million to settle false-testing lawsuit,” Andy Pasztor, The Wall Street Journal, 9/11/96.
• “Two Hughes whistle-blowers to split $891,000,” Henry Weinstein, Los Angeles Times, 9/11/96.
• “Hughes whistle-blowers share $891,000 from suit,” Andre Mouchard, The Orange County Register, 9/11/96.
• “Hughes pays $4 million to settle 1990 whistleblower suit,” Vago Muradian, Defense Daily, 9/11/96.
• “Hughes to pay U.S. $4.05 million to settle lawsuit,” Dori Meinert, San Diego Union-Tribune, 9/11/96.

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The Boeing Co.: A whistleblower lawsuit brought by Phillips & Cohen attorneys, and joined by the government, charged the company failed to properly install a part, known as a “fuzz buster,” on the Apache attack helicopter that prevents unnecessary maintenance stops — costing the U.S. Army more than $20 million dollars for aborted missions, unnecessary maintenance and lost training time.

• “Justice seeking $20 million from Boeing for faulty Apache safety system,” Defense Daily, 6/26/00.
• “U.S. sues Boeing over alarm wiring on Army copters,” Andy Pasztor, The Wall Street Journal, 6/23/00.
• “U.S. joins $20 mil suit vs. Boeing,” Riccardo A. Davis, The Arizona Republic, 6/23/00.
• “U.S. joins suit against Boeing over Apache helicopter part,” Seattle Times, 6/23/00.
• “Government joins a whistleblower suit vs. Boeing,” Seattle Post-Intelligencer, 6/23/00.

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