FOR IMMEDIATE RELEASE                                         CIV
THURSDAY, JUNE 12, 1997                            (202) 616-2765
                                               TDD (202) 514-1888


     WASHINGTON, D.C. -- Two defense contractors will pay the
United States $500,000 to settle allegations that they defrauded
the government by not properly testing certain components of
torpedoes as required under a military contract and using non-
conforming fasteners under several other Department of Defense
contracts, the Department of Justice announced today.  

     Assistant Attorney General Frank W. Hunger, in charge of the
Civil Division, said the settlement with Hughes Aircraft Company
and Hughes Aircraft Mississippi Inc. resulted from two qui tam
suits, which are complaints private parties can filed on behalf
of the federal government.

     "This recovery shows how effective the law is in encouraging
citizens to produce evidence of potential fraud against the
United States," Hunger said.  "We encourage all citizens to
contact federal officials if they detect what may be fraud
against the government."  

     An investigation by the Defense Criminal Investigative
Service and the Naval Criminal Investigative Service revealed
that Hughes failed to properly test certain electronic components
of Advanced Capacity Mark 48 torpedoes sold to the United States
Navy.  It also concluded that Hughes used flawed fasteners such
as stainless steel screws that failed to meet specifications
contained in several other military contracts.  

     Mark 48 torpedoes, which are used by nearly all modern
submarines, are the primary line of defense for submarine
warfare.  The torpedoes are used for submarine to surface
strikes, but their primary mission is to attack other submarines
under water.

     The settlement resolves the relators' claims relating to two
of several issues the relators raised and in which the United
States intervened.  It also resolves Hughes' potential civil
liability for the use of allegedly non-conforming fasteners under
the other military contracts.

     The relators, who were former employees of Hughes, jointly
will receive 20 percent of the total settlement amount, or a
total of $100,000.

     The Civil Division negotiated the settlement of the case,
United States ex rel. Laird A. Willis v. Hughes Aircraft Co., et
al., Civ. Action No. 3:93-cv-693BN (S.D. Miss) and United States
ex rel. Danny G. McDonald v. Hughes Aircraft Co., et al., Civ.
Action No. 3:94-cv-4455LN (S.D. Miss.).  The case was filed in
U.S. District Court in Jackson, Mississippi.