White-Collar Crime - Stealing From The Department Of Defense

The U.S. Department of Defense has a long history of lax control of its ordering and payment procedures, a serious problem in a department that spent an estimated $304 billion in 2003 and is expected to spend $314 billion in 2004 (GPO Access, March 24, 2004 [Online] http://www.gpoaccess.gov/usbudget/fy00/guide02.html [Accessed 12 July 2004]). The U.S. Department of Justice is continually looking for instances in which contractors have defrauded the government. Normally, these investigations end in agreement by the defrauding company to pay a fine.

In March of 1998 the U.S. Department of Justice announced that Unisys Corporation and Lockheed Martin Corporation would pay $3.2 million to settle allegations they had sold spare parts at inflated prices to the Department of Commerce for the NEXRAD Doppler Radar System. During the same month, the Pall Aeropower Corporation agreed to pay $2.2 million to settle allegations that it defrauded the United States by overcharging the Department of the Army for air filters for the AH-1 "Cobra" helicopter. The government also alleged that Pall had defrauded the Department of Defense on other contracts, but the settlement dismissed all allegations.

On March 30, 1998, the U.S. Department of Justice announced that Alliant Techsystems, Inc., and Hercules, Inc., had agreed to pay $4.5 million to settle allegations they illegally overcharged the Navy for labor costs on contracts implementing the Intermediate-Range Nuclear Forces (INF) Treaty. According to the complaint, "Managers at Alliant and Hercules regularly directed their employees to mischarge labor time to a number of military contracts even though management knew the employees did not devote as much time to the contract as was charged to the government." On April 23, 1998, the Justice Department reported that M/A-COM, Inc., a division of AMP Incorporated, agreed to pay $3 million to settle claims that it failed to perform some required tests on electronic components.