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General Dynamics Agrees to $1.8 Million Settlement in Fraud Lawsuit

March 12, 1995

LOS ANGELES (AP) _ General Dynamics Corp. will pay $1.8 million to settle a federal lawsuit alleging that it overbilled the government for testing F-16 fighters.

The lawsuit was filed in 1990 by four former company employees who tested the fighter jets at Edwards Air Force Base.

The workers claimed the aerospace company billed the Defense Department for thousands of hours that were never worked, using falsified time cards from employees who regularly left the plant early.

The scheme ran from 1982 to 1986, involved about 50 workers, and resulted in about $1.8 million in overbilling charges, said Assistant U.S. Attorney Frank D. Kortum.

Under federal law, the whistle-blowers will split 22.5 percent, or $405,000 of the settlement, their lawyer, William Ramsey, said in announcing the settlement Friday.

The agreement was reached nearly a month ago and a judge on Wednesday agreed to dismiss the case at the request of all parties, Ramsey said.

General Dynamics is the latest defense contractor to run afoul of the False Claims Act, which allows citizens compensation if their lawsuits recover money the government may have lost through fraud.

The largest-ever settlement under the whistle-blower provision, $150 million, was paid by United Technologies Inc. in March 1994 to settle claims that its helicopter division improperly charged the federal government for work not yet done.

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