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Company Pleads Guilty to False Parts Testing, Agrees to $17 million Fines

February 28, 1990

LOS ANGELES (AP) _ Northrop Corp. pleaded guilty Tuesday to 34 federal counts related to falsified testing of parts for the AV-8B Harrier jet and cruise missile components and agreed to pay a $17 million fine.

The defense contractor, which builds the B-2 bomber, entered the pleas on charges of making false statements to the government through attorney Richard Sauber.

The company said in a statement that the government had agreed to drop 141 other counts as part of the agreement.

Prosecutors said charges would be dropped against Joseph Yamron, 62, vice president and general manager of Northrop’s Norwood, Mass.-based Precision Products Division, and Leopold Engler, 60, vice president of instrument operations there.

The two men, who have been on administrative leave to prepare their defense, will return to their former duties, Northrop said.

″As part of the compromise the government and Northrop have resolved a number of other pending investigations the government has been conducting,″ Northrop said in its statement.

The company asserted that, according to the military services that use the Harrier and the cruise missile, ″both systems have performed satisfactorily in flight operations.″

Earlier Tuesday, a former Northrop Corp. plant manager pleaded guilty in federal court to charges of falsifying test data on components of cruise missile guidance systems.

Charles Gonsalves entered the plea under an agreement with prosecutors in which he would be sentenced to no more than three years in prison and be fined a maximum of $1.2 million.

Gonsalves, once supervisor of Northrop’s Western Services Department, pleaded guilty to one conspiracy count and seven counts of making false statements to the government from 1984 to 1987.

Sentencing was set for May 1 before U.S. District Judge Pamela Ann Rymer.

Gonsalves entered his plea as a jury was about to hear the case against him, quality assurance supervisor Cheryl Hannan and Northrop on charges related to the Harrier parts.

Prosecutors agreed to a diversion program for Hannan, who was charged in both the Harrier and missile aspects of the case, and charges will be dropped if she completes the program to the satisfaction of probation officials.

Howard Hyde, chief engineer at Western Services, pleaded guilty last May to charges involving falsifying tests on the jet parts.

The April 1989 indictment charged that the company and the five current and former employees conspired between the 1970s and 1989 to install parts for the cruise missile’s flight data transmitter that failed to meet government specifications.

It also said the transmitter required extensive reliability testing that was not performed. Instead, the indictment said, three of the defendants supervised false testing and falsification of test results.

Concerning the Harrier jet program, the indictment accused the defendants of failing between 1981 and 1986 to conduct vibration tests of the jet’s rate sensor assemblies at levels required by contract. The assemblies are part of the flight stabilization system of the attack jet.

The company said it first discovered and disclosed to the government and the public in July 1987 that some of the 30 employees at the Western Services Department had ″admitted failing to perform certain tests on electronic equipment.″

The plant manager and three of his employees were dismissed. The plant was closed quickly and its functions transferred to Precision Products, Northrop said.

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