News and Press Releases

The United States and General Dynamics Settle Civil Fraud Claims for over $ 4 Million

FOR IMMEDIATE RELEASE
August 18, 2008

Court-Approved Settlement Resolves Claims That Company Subsidiary Fraudulently Billed Government For Defectively Manufactured Military Equipment

Benton J. Campbell, United States Attorney for the Eastern District of New York, and Kenneth Siegler, Resident Agent-in-Charge, Defense Criminal Investigative Service, New York (“DCIS”), today announced the settlement of claims that a subsidiary of General Dynamics Corporation fraudulently billed the government for parts used in Navy aircraft and submarines. Pursuant to the settlement, which was approved by United States District Judge Denis R. Hurley, General Dynamics and the subsidiary, General Dynamics Armament and Technical Products, Inc. (“GDATP”), have agreed to pay the United States $4,058,750.

The government’s claims arose from an investigation that started with the filing of a suit pursuant to the False Claims Act, 31 U.S.C. §§ 3729-33, by former employees of GDATP’s Glen Cove, Long Island, facility. United States ex rel. McMillan et al. v. General Dynamics Armament and Technical Products, Inc. and General Dynamics Corp., No. CV-03-4090 (EDNY).1 As a result of its investigation, the government alleged that, during the period September 2001 through August 2003, GDATP defectively manufactured or failed to test parts used in various Navy aircraft, including the C-141 transport plane, and that the company also failed to properly manufacture or test components made for use in Los Angeles and Trident Class submarines. The government charged that GDATP billed the Navy for the components despite the fact that both GDATP and General Dynamics knew that the equipment did not meet military specifications.

General Dynamics and GDATP have denied the government’s allegations.

“Fraudulent practices that could compromise the integrity and reliability of equipment used by the men and women of our nation’s armed services is inexcusable,” stated United States Attorney Campbell. “It is our duty to our fellow citizens who serve our country to vigorously investigate and prosecute those who engage in such activity.”

DCIS Resident Agent-in-Charge Siegler stated, “America’s armed forces deserve the very best equipment as they perform their jobs in these difficult times. The components manufactured by the defendants are vital to our nation’s defense and should have been manufactured to the highest standards to support our national priorities. The Defense Criminal Investigative Service will continue to investigate violations of law and support the Justice Department in its efforts to ferret out fraud in the federal procurement process.”

The government’s case was litigated by Assistant United States Attorneys Richard K. Hayes and Vincent Lipari, with the assistance of Emily Rosenthal, Affirmative Civil Enforcement Auditor.

 

 

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1 The False Claims Act ("FCA") provides that under certain circumstances a person with information that false or fraudulent claims have been presented to the government for payment may bring a lawsuit for the person and for the United States. These actions are called qui tam actions, and the person bringing the action is known as a relator. Subject to the provisions of the FCA, the relator may be entitled to share in any recovery made by the United States in the suit.


 


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