FOR IMMEDIATE RELEASE CIV FRIDAY, SEPTEMBER 8, 1995 (202) 616-2765 TDD (202) 514-1888 DEPARTMENT OF JUSTICE SUES MCDONNELL DOUGLAS FOR CONTRACT FRAUD WASHINGTON, D.C. -- The Department of Justice announced today it has taken over a qui tam case alleging that McDonnell Douglas Corporation defrauded the United States by routinely mischarging labor costs on a number of Department of Defense airplane contracts, including the contracts for the A-12 and C-17 aircraft, from at least 1989 through 1995. The Department filed a notice of intervention under seal on August 21, 1995, in U.S. District Court in St. Louis, Missouri. The court unsealed the case, United States of America, ex rel. Daniel O'Keefe v. McDonnell Douglas, Thursday. The Department said it would file an amended complaint later. The Department said there is a separate suit in the Court of Federal Claims in Washington, D.C., in which the A-12 contractors, McDonnell and General Dynamics, are challenging the Navy's termination of the A-12 contract for default. O'Keefe, a sheet metal worker, is a former McDonnell employee. The Department intervened following an investigation by the Defense Criminal Investigative Service, Federal Bureau of Investigation and Naval Criminal Investigative Service. A qui tam suit is an action filed by a private party under the False Claims Act on behalf of the United States, alleging the submission of false claims for payment to the government. The Department decides whether to intervene and prosecute such a suit on behalf of the United States. A proper relator is entitled to receive a portion of the proceeds of the suit if the prosecution is successful. ##### 95-473