CORPORATE CRIME REPORTER
Feds
Join False Claims Act Lawsuit Against Lockheed Martin
21 Corporate Crime Reporter 46, November 19, 2007
Federal officials have joined two whistleblowers in alleging that Lockheed Martin
Corporation and a group of vendors overcharged the federal government.
The lawsuit also names Tools & Metals Inc. (TMI), Todd Loftis, TMI's former president and CEO, and Linda Loehr, TMI's former officer, director and beneficial owner.
The lawsuit was originally filed in federal court in Dallas by a former TMI account executive, John Becker, and a competitor to TMI, Robert Spencer, under the False Claims Act.
On December 8, 2005, Loftis pleaded guilty to one count of conspiracy to defraud the United States with false and fraudulent claims in connection with TMI's mischarging.
He is currently serving a seven year sentence.
The whistleblower complaint, which preceded Loftis' plea and which the Justice Department has now joined, alleged that Loftis through TMI, a company that sold perishable tools that Lockheed used in manufacturing, caused false claims to be submitted by Lockheed to the Department of Defense from January 1998 to February 2006.
Lockheed is also alleged to be independently liable for TMI's violation of the FCA due to its reckless oversight of TMI.
The lawsuit alleges that Loehr – the beneficial owner of TMI – recklessly failed to carry out her responsibilities as an officer and director of TMI.
The Justice Department declined to intervene in the relators' bid collusion and conspiracy claims and declined to intervene against other defendants named in the relators' complaint.
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