Northrop Grumman Systems Corp Will Pay $31.65 Million to Settle Defense Contract Fraud Allegations

Northrop Grumman Systems Corp Will Pay $31.65 Million to Settle Defense Contract Fraud Allegations

Northrop Grumman, a defense contractor, has agreed to pay $27.45 million to settle claims of fraudulent billing.  

An investigation led by the Air Force Office of Special Investigations (“AFOSI”), the Defense Criminal Investigative Service (“DCIS”), and the FBI uncovered an international scheme to defraud the U.S. Air Force. The agencies found out that employees at Northrop Grumman Systems Corporation (“NGSC”) illegally profited by inflating their work hours on bills for two contracts with the armed forces.

According to the DOJ, the company billed the Air Force for working hours claimed by employees assigned to the Middle East who had not actually worked those hours. From January 2011 to October 2013, the NGSC deliberately mischarged the Air Force for 12 to 13.5 hour work days when, in fact, the workers were not working overtime, but engaging in activities such as sports and partying (among themselves and with their families) and enjoying their five-star accommodations.

By overstating the number of hours worked, employees personally profited, defrauding American taxpayers by roughly $5 million....

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