Raytheon has agreed to pay more than $950m to settle investigations by the US Justice Department into allegations of government contract fraud and violations of both the Foreign Corrupt Practices Act (FCPA) and the Arms Export Control Act (AECA).
The defence contractor admitted to defrauding the US Department of Defense (DoD) by supplying defective pricing on contracts, including for PATRIOT missile systems.
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The company will enter a three-year deferred prosecution agreement (DPA) after being charged with two counts of major fraud against the US in the District of Massachusetts.
Raytheon admitted to two separate schemes aimed at defrauding the DoD in the provision of defence articles and services.
Additionally, a separate DPA was entered in the Eastern District of New York, where Raytheon was charged with conspiracy to violate the FCPA and the AECA.
As part of the agreements, Raytheon is required to retain an independent compliance monitor, enhance its internal compliance program, report any further misconduct, and cooperate with ongoing or future criminal investigations.
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By GlobalDataThe company also reached a settlement regarding the False Claims Act related to the defective pricing schemes.
This resolution is in coordination with the Securities and Exchange Commission.
US Justice Department criminal division deputy assistant attorney general Kevin Driscoll said: “Such corrupt and fraudulent conduct, especially by a publicly traded US defence contractor, erodes public trust and harms the DoD, businesses that play by the rules, and American taxpayers.
“Today’s resolutions, with criminal and civil recoveries totalling nearly $1bn, reflect the Criminal Division’s ability to tackle the most significant and complex white-collar cases across multiple subject matters.”
Court documents revealed that between 2012 and 2016, Raytheon employees engaged in bribery to secure business from the Qatar Emiri Air Force (QEAF).
Payments were made under sham subcontracts to gain assistance from a QEAF official in obtaining air defence contracts.
Raytheon also formed a teaming agreement with a Qatari entity to corruptly secure a direct contract for building a joint operations centre.
Furthermore, Raytheon failed to disclose to the State Department’s Directorate of Defense Trade Controls the fees and commissions paid in relation to two Qatar-related contracts, which included bribes to the QEAF official.
This announcement comes after the US Air Force awarded Raytheon a $73m contract to boost its manufacturing capacity for the Hypersonic Attack Cruise Missile, earlier in October 2024.
