General Dynamics Corp. has agreed to settle claims that it fraudulently billed the U.S. government for defective parts that were used in Navy aircraft. General Dynamics is the second-largest shipbuilder for the Navy, behind Northrop Grumman. The Navy’s lawsuit alleged that for two years—from September 2001 to August 2003—a Long Island division acquired by General Dynamics in 2004 defectively manufactured or failed to test parts used in Navy aircraft, like the C-141 transport plane. In addition, the company engaged in the same fraudulent conduct regarding components used in the Los Angeles- and Trident-class submarines.
The General Dynamics now-closed unit knew the parts failed to meet military specifications and billed the government anyway. The violations came to light after whistle-blower employees filed a False Claims Act suit in 2003. “Fraudulent practices that could compromise the integrity and reliability of equipment used by the men and women of our nation’s armed services is inexcusable,” remarked Benton Campbell, interim U.S. attorney for the Eastern District of New York.
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