A subsidiary of RTX Corporation, the defense contractor formerly known as Raytheon Technologies Corporation, agreed to pay more than $950 million to resolve the United States government‘s investigations into a major fraud scheme, the U.S. District Attorney’s Office for Massachusetts announced Wednesday.
Investigators were looking into schemes involving defective pricing on certain government contracts and violations of laws around foreign corrupt practices, and arms export controls, according to the U.S. Attorney’s office.
The Virginia-based company will pay $574 million to resolve criminal and civil liability for overcharging government contracts.
The company entered into a three-year deferred prosecution agreement in connection with criminal charges filed on Wednesday in Massachusetts charging Raytheon with two counts of major fraud against the U.S.
As part of the $574 million resolution, Raytheon agreed to pay $147 million to resolve the criminal allegations.
The settlements also resolve civil allegations that Raytheon gave untruthful certified cost or pricing data when negotiating prices with the Department of Defense for numerous government contracts and double-billed the department on a weapons maintenance contract.
By agreeing to pay $428 million to resolve the civil allegations, Raytheon Company will pay the second largest procurement of fraud recovery under the False Claims Act, according to the U.S. Attorney.
In accordance with the terms of the deferred prosecution agreement, Raytheon will pay a criminal monetary penalty of $147.7 million and $111.2 million in victim compensation. They will also retain an independent compliance monitor for three years.
The announcement comes hours after authorities in the Eastern District of New York said the company would also enter into a three-year agreement with the government after being charged with criminal charges linked to a bribery scheme with Qatar.
The company will pay $252 million to the U.S. government to resolve the criminal charges alleging it paid bribes to secure contracts in Qatar, according to federal prosecutors.
The Justice Department’s resolutions with the company mean that federal agencies can determine whether Raytheon or any other individuals or entities associated with the company should be suspended or debarred as federal contractors.
“Raytheon engaged in criminal schemes to defraud the U.S. government in connection with contracts for critical military systems and to win business through bribery in Qatar,” Deputy Assistant Attorney General Kevin Driscoll of the Justice Department’s Criminal Division said in a statement.
“Such corrupt and fraudulent conduct, especially by a publicly traded U.S. defense contractor, erodes public trust and harms the Department of Defense, businesses that play by the rules and American taxpayers,” Driscoll said.
The combination of the New York and Massachusetts resolutions represents nearly $1 billion collected from Raytheon from criminal and civil penalties.
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