Ex-Northrop Engineer Pleads Guilty to Fraud
A former Northrop Corp. engineer pleaded guilty Wednesday in Los Angeles federal court to charges that he persuaded Northrop officials to award $600,000 in subcontract work on the Air Force’s top-secret Stealth bomber to an Orange County firm that he secretly owned.
In entering the pleas to two counts of wire fraud, William Reinke, 56, of Brea admitted that he violated a conflict-of-interest policy that Northrop had instituted to prevent cheating in defense contract work. The wire fraud charges covered checks that were mailed to his firm, RF Engineering.
“I recognize that it was wrong of me not to notify Northrop formally and in writing that I was the principal owner of RF Engineering and had primary control of the company,” Reinke wrote in a prepared statement that was presented during Wednesday’s hearing.
RF Engineering was a subcontractor that Reinke formed that specialized in classified equipment that could be used in the Stealth bomber, the plane designated to replace the aging B-52.
Admitted Overcharging
In addition to violating Northrop’s policies, Reinke admitted selling parts to Northrop that were obtained elsewhere at cheaper prices. For example, $20 headphones were resold to Northrop for $90 and cable bought at $1.24 a foot was resold at $4.50 a foot.
Reinke was asked to resign his post at Northrop’s Advanced Systems Division in Pico Rivera last August after federal investigators uncovered his fraud scheme, said Assistant U.S. Atty. Fred D. Heather.
Heather, who has been the federal government’s chief prosecutor of fraud cases within Southern California’s defense industry, told U.S. District Judge Stephen V. Wilson that Reinke has agreed to cooperate with federal investigators looking into possible fraud in other defense-related projects.
Reinke, who said little during his hearing, faces a maximum sentence of 10 years in prison and a $500,000 fine. Sentencing was set for May 29.
When asked after the hearing why his client pleaded guilty, defense attorney George Porter replied, “Because he thought it (the federal complaint against him) was a fair statement of what he did.”
