FOR IMMEDIATE RELEASE CIV TUESDAY, MAY 20, 1997 (202) 616-2765 TDD (202) 514-1888 UTC PAYS U.S. $14.8 MILLION TO SETTLE MILITARY AID COMPLAINT WASHINGTON, D.C. -- The Pratt & Whitney Group of United Technologies Corporation Inc. (UTC) will pay the United States $14.8 million for allegedly conspiring to divert $10 million in United States military aid into a slush fund subject to the exclusive control of an Israeli Air Force officer, the Department of Justice announced today. The United States previously recovered about $2 million in funds related to the scheme. The settlement resolves a claim filed by the United States in U.S District Court in Miami, Florida, against UTC. It alleged that UTC and former Israeli Air Force officer Rami Dotan set up a $10 million fund with U.S. military aid that could be spent at Dotan's discretion, without the required oversight of the Defense Security Assistance Agency or procurement authorities within Israel. In 1991, Dotan was sentenced to 13 years' imprisonment by an Israeli military court for his role in related schemes. Frank W. Hunger, Assistant Attorney General for the Civil Division, praised the Israeli Ministry of Defense and National Police for their help in investigating the case. "They provided exemplary assistance in connection with the Civil Division's prosecution of this matter," Hunger said. "The Israeli police assisted with numerous witness interviews, while the Israeli Ministry of Defense cooperated with significant document requests by both sides, and produced scores of Israeli witnesses for interviews and depositions." The complaint alleged that UTC acquired the $10 million in funds for Dotan through false billings under a contract with Israel to develop and manufacture a PW1120 turbojet engine for an Israeli LAVI fighter aircraft. UTC allegedly prepared false purchase orders and submitted false invoices to Israel between March and July 1987 to collect $10 million for engine improvement work that was never performed, according to the complaint. UTC and Dotan unlawfully concealed a side-deal to use this $10 million as a "bank" for Dotan. At the direction of Dotan, the complaint said, UTC paid approximately $2.4 million of the $10 million to Yrretco Inc. and Airtech Inc., two New Jersey companies. The manager of Yrretco and Airtech deposited hundreds of thousands of dollars of the U.S. military aid into the personal bank accounts of Nehemia Oron, a former IAF Colonel, and Yoram Ingbir, the owner of Ingbir Engineering. In 1992, the United States recovered $2 million from Yrretco, Airtech and Oron, an alleged coconspirator. Dotan confessed to the Israeli police that he and Ingbir planned to split Ingbir's earnings. Hunger said the Department received substantial assistance from the Dayton, Ohio, branch office of the Defense Criminal Investigative Service, and the Defense Contract Audit Agency. The General Electric Company and National Airmotive Company previously have pled guilty to felony counts, and paid substantial civil damages and penalties, for similar schemes carried out at the request of Dotan. The case is United States v. United Technologies Corporation, No. 95-8251-CIV-MARCUS (S.D. Florida). ##### 97-211