The U.S. Department of Justice (DOJ) announced Wednesday that Raytheon Company, a subsidiary of RTX, will pay more than $950 million as a result of an investigation into a major government fraud scheme.
According to the DOJ, Raytheon will pay the fine and enter into a three-year deferred prosecution agreement (DPA) in connection with an investigation into a scheme involving defective pricing on government contracts, foreign bribery and export controls.
“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,” Deputy Assistant Attorney General Kevin Driscoll of the Justice Department’s Criminal Division said. “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. Today’s resolutions, with criminal and civil recoveries totaling nearly $1 billion, reflect the Criminal Division’s ability to tackle the most significant and complex white-collar cases across multiple subject matters.”
The DOJ said Raytheon admitted to engaging in two separate schemes to defraud the U.S. Department of Defense in connection with the provision of defense articles and services, including PATRIOT missile systems and a radar system. The company also entered into a three-year DPA in connection with a criminal charge in the Eastern District of New York which charged the company with conspiracy to violate anti-bribery provisions of the FCPA for a scheme to bribe a Qatar government official and conspiracy to violate the AECA for willfully failing to disclose the bribes in export licensing applications with the U.S State Department as required by law.
And, officials said, the company reached a separate False Claims Act settlement related to the defective pricing scheme. The agreements require the company to retain an independent compliance monitor, enhance its internal compliance program, report evidence of additional misconduct to the DOJ and to cooperate with ongoing or future criminal investigations.
“Government contractors have an obligation to be fully transparent about their cost and pricing data when they seek an award of a sole source contract,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to holding accountable those contractors that knowingly misrepresent their cost and pricing data or otherwise violate their legal obligations when negotiating or performing contracts with the United States.”