A Virginia-based contractor, Raytheon Company (Raytheon), is set to pay $950m for bribery, export control, and defective pricing cases brought forward by the Justice Department.
Ratheon is a subsidiary of defense contracting company RTX, formerly known as Raytheon Technologies Corporation. The Justice Department has conducted extensive investigations into allegations that Ratheon was complicit in a government fraud scheme involving defective pricing on specific government contracts.
The government watchdog’s findings further revealed that Raytheon was involved in violations of the Foreign Corrupt Practices Act (FCPA), the Arms Export Control Act (AECA), and the terms set out in the International Traffic in Arms Regulations (ITAR).
“Investigating procurement fraud impacting DOD contracts is a top priority for the Defense Criminal Investigative Service (DCIS), the law enforcement arm of the DOD Office of Inspector General,” said Inspector General Robert Storch of DOD. “When DOD contractors fail to provide truthful pricing data and overcharge the government, they undermine the integrity of the DOD procurement process and harm critical DOD programs.
Raytheon enters into three-year deferred prosecutions and $950m payment agreement
The District of Massachusetts bore witness to the criminal information that set the terms of a three-year deferred prosecution agreement (DPA) for Raytheon. The company was hit with two counts of major fraud against the United States. They admitted using two separate schemes to defraud the Department of Defense (DOD) to provide defense articles and services, including PATRIOT missile and radar systems.
Further court action was brought to bear against the company in the Eastern District of New York, charging Raytheon with two counts. These included “conspiracy to violate the anti-bribery provision of the FCPA for a scheme to bribe a government official in Qatar and conspiracy to violate the AECA for willfully failing to disclose the bribes in export licensing applications with the Department of State as required by part 130 of ITAR.”
Raytheon also reached a separate False Claims Act settlement with the department regarding the defective pricing schemes. The Justice Department’s FCPA and ITAR resolutions are coordinated with the Securities and Exchange Commission (SEC).
Raytheon, the contractors, and senior staff members are further being investigated to determine whether they should be suspended or debarred as federal contractors.
“Raytheon engaged in criminal schemes to defraud the U.S. government in connection with contracts for critical military systems and to win business through bribery in Qatar,” said Deputy Assistant Attorney General Kevin Driscoll of the Justice Department’s Criminal Division. “Such corrupt and fraudulent conduct, especially by a publicly traded U.S. defense contractor, erodes public trust and harms the DOD, businesses that play by the rules, and
American taxpayers.”
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