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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