Patriot missile manufacturer fined almost $1bn
The US government has ordered defense contractor Raytheon to pay more than $950 million in fines for inflating federal contracts and bribing high-level foreign military officials, it was announced on Wednesday.
According to a press release on the US Justice Department’s website, Raytheon – which is a subsidiary of RTX – has not disputed the allegations. It has agreed to pay the fine and enter into a three-year deferred prosecution agreement (DPA) in connection with the charges, which include two counts of “major fraud against the United States.”
“Raytheon admitted to engaging in two separate schemes to defraud the Department of Defense (DOD) in connection with the provision of defense articles and services, including PATRIOT missile systems and a radar system,” the Justice Department’s statement read.
According to prosecutors, from 2012 through 2013 and again from 2017 through 2018, Raytheon employees provided “false and fraudulent information” to the Defense Department during contract negotiations on the sale of Patriot missile systems and on the operation and maintenance of a radar system. In both cases, prosecutors said the Defense Department was lied to and ended up paying Raytheon $111 million more than it should have.
Raytheon has also admitted to repeatedly providing false information to the Defense Department between 2009 and 2020 regarding cost and pricing on numerous government contracts.
Additionally, the manufacturer has entered into a separate three-year DPA on two more charges which include a conspiracy to bribe a high-level Qatari military official and a conspiracy to violate the Arms Export Control Act (AECA) in order to conceal bribes in export licensing applications with the State Department.
Raytheon is also said to have reached a separate False Claims Act settlement with the Justice Department relating to the defective pricing schemes.
“Raytheon engaged in criminal schemes to defraud the US government in connection with contracts for critical military systems and to win business through bribery in Qatar,” Deputy Assistant Attorney General Kevin Driscoll of the Justice Department’s Criminal Division was quoted as saying.
“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,” Driscoll added.
Under the two DPA agreements, Raytheon will be required to retain an independent compliance monitor for three years, enhance its internal compliance program, report evidence of additional misconduct, and cooperate in any ongoing or future criminal investigations, the Justice Department explained.
