Defence contractor fined for fraud

Press, 8 March 1989, Page 39

Defence contractor fined for fraud

NZPA-Reuter Los Angeles Rockwell International Corporation, one of the largest United States defence contractors, was fined SUSS.S million (SNZB.97M) for overcharging the Government on a sophisticated satellite navigation contract. U.S. Attorney, Mr Robert Bonner, said the fine was the largest ever imposed on a corporation for criminal defence fraud. “I am hopeful that a fine of this magnitude will send out a message to the defence industry that Federal Courts are taking defence procurement fraud very seriously,” he said. U.S. District Judge, Consuela Marshall, imposed a maximum SUSSOO,OOO fine on a conspiracy count and another SUSSM on a count of contempt of court. She also put Rockwell on five years probation and ordered the company to repay the $U5446,000 it overcharged. Rockwell, manufacturer of the B-l bomber, pleaded guilty in January to the two major counts in a seven-

count Federal indictment. The indictment charged that Rockwell and two former employees billed on two separate contracts more than SUS4OO,OOO in costs incurred on an Air Force programme to manufacture a SUSI.2B satellite navigation system. The contempt charge involved violation of a 1982 court injunction prohibiting Rockwell from submitting false claims to the Government. At the sentencing hearing, Rockwell lawyer, Mr James Neal, said the firm accepted criminal responsibility for its employees’ actions. But Rockwell said in a statement that it was “very disappointed with the Federal Court sentencing ruling” and would file an appeal. The statement said: “Rockwell was sentenced today because of our responsibility under law for the acts of our employees. “We accept that responsibility, but we continue to believe that the company itself should not have been indicted.”