CORPORATE CRIME REPORTER
GE,
Two Subcontractors, to Pay $11.5 Million to Settle False Claims Act Charges
20 Corporate Crime Reporter 31(1), July 21, 2006
General Electric Co. (GE) and two of its subcontractors paid $11.5 million to
settle a lawsuit that alleges that GE sold defective blades for engines in U.S.
military airplanes and helicopters.
The False Claims Act lawsuit alleged quality-control problems involving the
manufacture of several types of engine blades at GE's Aircraft Engines division
facility in Madisonville, Kentucky.
These problems included nonconformances in casting and in non-destructive testing.
Two subcontractors, Howmet Corp., a subsidiary of Alcoa, and Precision Castparts
Corp. manufactured unfinished castings for the blades, which GE then finished
at the Madisonville facility.
"This case demonstrates the federal government's commitment to ensuring
that contractors meet the highest quality and safety standards when selling
aircraft parts and equipment to the Defense Department," said Stuart Schiffer
of the Civil Division. "This lawsuit is an excellent example of cooperation
among federal agencies to help safeguard the lives of our service members and
protect public funds."
The lawsuit was filed in Owensboro by several employees of GE's Madisonville
facility.
The government said that the employees will split their share -- $2,357,500.
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