Fraud Investigation Continues : Ex-Manager of Litton Unit Is Indicted

A former Litton Industries division manager was indicted on Tuesday as part of an ongoing federal investigation into a scheme that allegedly defrauded the Pentagon of $6.3 million by inflating prices on military contracts.

A federal grand jury in Philadelphia indicted Roland Edward Fisher, 57, vice president and general manager of Litton’s Clifton Precision division in Springfield, Pa., on six counts of mail fraud and one count of racketeering. It accused Fisher of lying and submitting false documents to Defense Department auditors.

Last July, the Clifton division and its controller and materials manager pleaded guilty to defrauding the government and trying to cover up overcharges on 45 contracts involving aircraft instruments and radar equipment.

Litton agreed to pay nearly $15 million in restitution and fines and agreed to cooperate in the investigation. The Navy also barred Litton from receiving new Defense Department contracts for about three months.

The new indictment alleges that Fisher, who was under investigation for 10 months, directed the two employees to inflate estimates of material costs by forging documents, submitting fraudulent prices on bills from vendors and signing phony time cards.

“They worked under Fisher and reported directly to him,” said Nicholas C. Harbist, an assistant U.S. attorney who is heading the investigation in conjunction with the Defense Department.

Litton spokesman Robert S. Knapp said Fisher was fired in late 1985. Knapp said that Litton is cooperating fully with the investigation and that “internal controls and monitoring procedures were strengthened to provide further assurance of full compliance with both corporate and government policies and requirements.”

Fisher, who faces up to 60 years in prison and $51,000 in fines if found guilty, will be arraigned in about two weeks in U.S. District Court in Philadelphia, Harbist said.

Harbist said the government is continuing its investigation of the Litton division but would not say if further indictments are pending.