Consumer Fraud

General Electric settles whistleblower lawsuit alleging military contracting fraud for $6.58 million

osha whistle General Electric settles whistleblower lawsuit alleging military contracting fraud for $6.58 millionA whistleblower lawsuit filed against General Electric Aviation Systems (GEAS) by a former employee who allegedly witnessed the company committing several acts of fraud against the U.S. government has resulted in an agreement to settle the charges for $6.58 million.

Ohio-based GEAS manufactures and sells integrated electrical systems and components for commercial and military aircraft. According to the Department of Justice (DOJ), the company allegedly submitted false claims to the U.S. in connection with several contracts it had with the Defense Department.

The Navy contracted GEAS to manufacture external fuel tanks (EFTs) for use on the F/A-18 Hornet strike fighter jets, which the company manufactured at its plant in Santa Ana, Calif.

According to the DOJ, in March 2008 a GEAS-manufactured EFT failed government testing, which triggered a probe by the Defense Contract Management Agency, the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Navy Criminal Investigative Service. Based on that investigation, the U.S. alleged that GEAS knowingly failed to comply with contract specifications and failed to undertake proper quality control procedures in connection with 641 EFTs it delivered to the Navy between June 2005 and February 2008.

The settlement also resolves allegations that, between June 2010 and June 2011, GEAS knowingly and falsely represented to another government contractor that it had performed a complete inspection of 228 drag beams to be used on Army UH-60 Blackhawk helicopters, and that those 228 drag beams conformed to all contract specifications.

Defense contractors agree to provide the government with a quality product, and in doing so, they promise to follow strict manufacturing and testing protocols to ensure that our military receives only the best equipment,” said André Birotte Jr., U.S. Attorney for the Central District of California.

“In this case, some of the hardware sold to the government did not meet quality-control standards, and that failure could have put our service members at risk,” Mr. Birotte added. “This multimillion dollar settlement is designed to ensure that General Electric Aviation Systems does not engage in this type of misconduct in the future, and this case should serve as a warning to any government contractor who thinks it can cut corners.”

Former GEAS Santa Ana employee Jeffrey Adler filed a lawsuit detailing GEAS’s alleged misconduct under the qui tam “whistleblower” provisions of the False Claims Act (FCA), which enable private individuals called “relators” to bring lawsuits for false claims on behalf of the United States government, and to receive a portion of the settlement or judgment.  Mr. Adler’s share of the settlement has not yet been determined.


U.S. Department of Justice