Us Department Of Justice Official Release - 02922-107 Txt

FOR IMMEDIATE RELEASE THURSDAY, FEBRUARY 23, 1995

CIV (202) 616-2765 TDD (202) 514-1888

UNITED STATES INTERVENES IN SUIT AGAINST LUCAS INDUSTRIES WASHINGTON, D.C. -- The Department of Justice announced today it has taken over a whistleblower case alleging that United States subsidiaries of Lucas Industries, plc., the British industrial giant, defrauded the Department of Defense by concealing defects, fractures and imperfections in military parts used in Navy fighter planes, Army rocket launchers and other military equipment. The Department said Lucas falsified gear charts for a device called the Airframe Mounted Accessory Drive (AMAD), a key component of the Navy's front-line carrier based fighter, the F/A-18 Hornet. An inspection of a gearbox called the Azimuth Drive Unit (ADU), which Lucas produced for one of the Army's premier artillery systems, the Multiple Launch Rocket System, turned up other problems. The inspection showed that every one of 35 ADU samples, which were part of a shipment of 69 Lucas was about to send to the Army, contained major defects. Frank W. Hunger, Assistant Attorney General in charge of the Civil Division said, the qui tam suit, United States ex rel. Copeland v. Lucas Western Inc. and Lucas Aerospace Inc., was filed in September 1993 by Frederick C. Copeland, a former machinist for the company. The complaint was unsealed Wednesday in U.S. District Court in Salt Lake City, Utah. It alleged that Lucas Western (LWI) and its U.S.-based parent, Lucas Aerospace Inc., falsified defective test results and concealed imperfections and fractures in parts by plating them with chrome, then defrauded the government by knowingly shipping the non-conforming and defective parts to the Navy, Army and Air Force. LWI, based in Park City, Utah, manufactures aerospace gearboxes, hoists and similar devices for the military. The government is analyzing reports of accidents and mishaps involving military equipment to determine whether the defective parts were a factor. LWI received approximately $400 million in U.S. military contracts from fiscal 1987 through the present. A government investigation that began in July 1993 found many false and fraudulent testing practices by LWI. It said LWI personnel, when finding one conforming gear in a lot with many non-conforming gears, would run multiple gear charts from the single good gear and attach the charts to gears that had not been inspected. LWI also falsified manufacturing and assembly inspections on the AMAD's. The government alleges that 100 percent of the approximately 80 AMAD gearboxes subjected to tear down inspections as part of the investigation contained parts with major defects. On January 9, 1995, LWI pleaded guilty to 37 counts of making false certifications to the Department of Defense that 35

AMAD and two ADU gearboxes had been fully inspected in accordance with the applicable contractual requirements, when, in fact, they had not been. LWI paid a criminal fine of $18.5 million as a result of the investigation, which was conducted by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service and the Army Criminal Investigation Command. The False Claims Act entitles the government to recover three times its damages and a civil penalty of $10,000 for each violation (31 U.S.C. ​ 3729(a)). The government plans to file an amended complaint. Under the qui tam amendments, a private citizen can file a suit on behalf of the government and, if the suit is successful, receive up to 30 percent of any money the government recovers. ##### 95-107