According to a list put together by two of my fellow
whistleblower lawyers, Northrop-Grumman has paid more than any other defense contractor to resolve
claims that it cheated the Government. In fact, on a list of top 20 largest
payments made by defense contractors to resolve allegations of fraud,
Northrop-Grumman made the list 4 times, coming in at 1, 3, 7 and 11.
The Government recovered a whopping $1,554,200,000 in just the top 20 cases,
according to a list compiled by Mike Bothwell and Julie Bracker. Whistleblowers
brought 75% of these 20 lawsuits, meaning
the Government would not have known about 75% of these cases if it had
not been for a whistleblower who reported the facts about the fraud.
Under the False Claims Act, whistleblowers who successfully bring suit
under the False Claims Act are entitled to between 15% and 30% of what
the Government receives. Figures were not available for how much all of
these whistleblowers were paid, but at least three of them were paid $19,000,000
or more for their role in helping the Government get its money back.
Northrop-Grumman gets the “award” for appearing most frequently on the list.
That company alone paid the Government $578,200,000 to resolve four different
False Claims Act cases. In June and July 2003, Northrop-Grumman paid the
Government $111,200,000 and $80,000,000 to settle allegations that the
company violated the FCA by submitting false claims. In March 2005, Northrop-Grumman
paid the Government $62,000,000 to settle FCA allegations. And in April
2009, Northrop-Grumman paid the Government what Mike and Julie believe
is the largest settlement ever by a defense contractor to resolve allegations
of fraud under the False Claims: $325,000,000.
Two other companies appeared on the list twice.
Boeing Company appeared once for an April 1994 settlement in which it paid the Government
$75,000,000 to resolve allegations of fraud, and again in August 2000,
which it paid the Government $54,000,000 to settle another FCA case.
Teledyne settled two cases also, both in April 1994. Teledyne paid $85,000,000
for one False Claims Act suit and paid another $27,500,000 for a second case.
Twelve other defense contractors made the list.
Dana Corporation: In September 1995, Dana Corp. paid the Government $19,500,000. That case
was one of five brought by the Government itself, rather than a whistleblower.
FMC paid the Government $80,00,000 in October 2000. That case was significant
because the U.S. refused to intervene in the case, yet the whistleblower
pushed the case forward, and wound up exacting a huge recovery for the U.S.
General Electric coughed up $59,500,000 in July 1993, to resolve claims that it was defrauding
the Government.
Hercules: In another case handled exclusively by the whistleblower, Hercules had
to reimburse the Government $55,000,000 in May 1998.
Litton handed over $82,000,000 in a July 1994 suit.
Lockheed Martin paid 37,900,000 to resolve fraud claims in July 2003.
Lucas Industries ponied up $88,000,000 to settle a FCA case in September 1995.
Philips Electronics: In February 1996, Philips Electronics made the list of naughty defense
contractors when it handed over $65,300,000.
Pratt & Whitney paid $14,800,000 in May 1997.
Rockwell International made the list because it paid $27,000,000 in July 1995 to settle allegations of fraud.
Singer brought $55,500,000 to the table to settle a claim in July 1992.
United Technologies paid $150,000,000 in Marcy 1994 when it was accused of defrauding the
Government.
Figures were not available for the relator’s share in all of the
cases, but the whistleblower who filed suit against Lucas Industries received
a share of $19,360,000. One of the whistleblowers who sued Northrop-Grumman
received $27,200,000 of the $111,200,000 that the Government received.
The whistleblower who filed the case against Rockwell International received
$4,050,000. The suit against Teledyne netted the whistleblower $5,400,000,
and the relator who filed the United Technologies suit won $22,500,000.