Litton Unit Pleads Guilty in Fraud Case

A subsidiary of defense contractor Litton Industries pleaded guilty Tuesday to defrauding the government of more than $6 million and to covering up its practice of lying about about how much it cost to produce certain military equipment.

The subsidiary, Litton Systems, entered guilty pleas to 321 charges listed in an indictment announced July 15. U.S. District Judge Charles R. Weiner said he would rule Thursday on whether to accept a plea agreement calling for restitution of $6.3 million and a criminal fine of $3 million.

One of two men indicted, Michael J. Millspaugh, 34, of Buffalo Grove, Ill., pleaded innocent Tuesday and was released on $50,000 bond, the government said. Joseph DiLiberto, 68, of Levittown, Ill., was scheduled for arraignment Aug. 4.

The two men were officers of Clifton Precision’s Special Devices division, located in Springfield, Ill., which is the sole supplier of types of radar and instruments used aboard aircraft and ships in all branches of the armed forces.

Millspaugh, facing one count of racketeering, 20 counts of mail fraud and one count of making false statements to a government agency, is the former vice president of finance and administration at the division.

DiLiberto, charged with one count of conspiracy to make false statements to a government agency and one count of making false statements to a government agency, is the former materials manager at the division.

Tuesday’s guilty pleas by the division were entered by Alex B. Owen, a vice president for Litton Systems.