File photo by Chris Stone.

A subsidiary of the Northrop Grumman Corp. with offices in San Diego agreed Friday to pay $31.65 million to settle civil and criminal investigations into fraud arising out of its Battlefield Airborne Communications Node and Dynamic Re-Tasking Capability contracts with the United States Air Force.

Northrop Grumman Systems Corp. agreed to pay $27.45 million to settle civil allegations that it violated the False Claims Act by overstating the number of hours its employees worked on the BACN and DRC contracts with the Air Force.

Additionally, NGSC agreed to forfeit $4.2 million in a separate agreement to resolve a criminal investigation into fraudulent billing on the BACN contract. In exchange for admitting its employees’ misconduct, making full restitution and agreeing to cooperate in the ongoing criminal investigation, no criminal charges will be filed against NGSC.

“Federal contracts are not a license to steal from the U.S. Treasury,” said U.S. Attorney Adam Braverman. “DOJ (the Department of Justice) is firmly committed to vigilantly weeding out abuse and will swiftly pursue all available remedies when egregious fraud occurs.”

In the agreement resolving the criminal investigation of NGSC, the company admitted that its employees deployed to an air base in the Middle East defrauded the Air Force by overbilling time charged to the BACN contract.

Specifically, from January 2011 to October 2013, NGSC employees charged exactly 12 or 13.5 hours per day, seven days a week, despite the fact that the employees were not working those hours.

NGSC admitted that its employees billed time to the BACN contract when its employees were not working and engaged in leisure activities such as golfing, skiing, visiting local amusement parks, going out to eat or drink, shopping and enjoying various amenities at the five-star hotels where the employees were housed.

NGSC admitted that its employees working on the BACN contract overbilled the United States by more than $5 million at one site alone.

–City News Service

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