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Discussion Starter · #1 ·
Senior Chief Moderator Staff
Posts: 2063
(10/30/01 10:47:44 pm)
Reply | Edit | Del All God, I hate MERGERS....
I guess my company's merger that went bad isn't the ONLY one that did...

Check this out, from today's news:

Northrop Grumman Accused of Fraud
By MIKE ROBINSON, Associated Press Writer

CHICAGO (AP) - Northrop Grumman Corp. has been accused by the federal government of tens of millions of dollars of fraud in defense contracts, including one to produce top secret parts for the B-2 ``Stealth'' bomber.

The government said in civil court papers filed last week that the defense contractor produced bogus inventory records and other documents to hide the fact that it had inflated costs on contracts for producing radar jammers and other sophisticated electronic equipment.

The Chicago Tribune on Tuesday reported that federal prosecutors have begun a criminal investigation into the allegations.

Assistant U.S. Attorney Linda A. Wawzenski declined to comment about the Tribune report. An attorney for Northrop, Michael Dockterman, declined to comment, referring calls to a Northrop spokesman in Los Angeles. The spokesman did not immediately return a call Tuesday to The Associated Press.

The U.S. attorney's office in Chicago filed its civil lawsuit on behalf of two whistleblowers who say they were fired by the Los Angeles-based aircraft company in the late 1980s after contacting Defense Department criminal investigators and the FBI (news - web sites) concerning fraud.

The electronic equipment allegedly involved in fraud represented components not only of the batwing B-2s now in action over Afghanistan (news - web sites) but F-18 fighters and the B-1 and B-52 bombers, the government said.

The equipment is manufactured by a division of Northrop based in suburban Rolling Meadows, Ill.

The lawsuit says Northrop overcharged the government for the cost of parts that it had to scrap. It says whistleblower James H. Holzrichter discovered the problem in 1988 while reviewing computer printouts.

They showed that Northrop was charging the government for scrapping more parts than it had originally purchased, according to the lawsuit. It also says Northrop executives tried to fix the problem with a ``financial reconciliation'' program that involved bogus documents.

``Financial reconciliation was a scheme begun in late 1987 and continued at least through 1988 ... to defraud and mislead the United States,'' the lawsuit charges.

The lawsuit, assigned to U.S. District Judge Ronald A. Guzman, also says that whistleblower Rex A. Robinson told the government that Northrop billed the Defense Department for the time of employees who were waiting to be assigned to work.

Robinson said he was one of the employees, and that while he was in a ``holding tank'' he worked only about 50 percent of the time.

Under federal law, the whistleblowers can collect three times the amount of the fraud plus the fine applicable for the fraud if the allegations are proven.


Northrup seemed to be always in financial trouble, Jack was great, maybe even genius, as an engineer, but a lousy businessman, and Grumman goes back a LONG way with the Navy, almost to the beginning of Carrier Aviation, but now BOTH names may be "Mud."

If McDonnell/Douglas goes bad, too, I think I'll cry...
We must make war as we must; not as we would like. - Field Marshal Kitchener, 1915

Edited by: polishshooter at: 10/30/01 10:49:33 pm
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