TRW Agrees to $3-Million Fine for Overcharging Defense Dept.

Defense contractor TRW Inc. pleaded guilty today to conspiring to overcharge the government up to $11 million for military aircraft and M-1 tank parts and agreed to pay $3 million in fines.

TRW “deeply regrets that the events occurred” and has created programs approved by the Defense Department to prevent them from happening again, said TRW Vice President William Lawrence.

Lawrence, who entered the plea on three counts on behalf of the company, said TRW has paid a separate $3 million to be applied as an advance payment on restitution to the Defense Department. The amount of restitution TRW owes is to be decided in a pending civil case.

The company estimated that it inflated costs by $3 million to $11 million.

TRW also paid a combined criminal fine and penalty of $3 million, one of the largest ever assessed against a defense contractor for procurement fraud, said U.S. Atty. Patrick M. McLaughlin in Cleveland.

In connection with the case, two former TRW employees have pleaded guilty to defrauding the government, and one former employee faces trial Sept. 6.

The guilty pleas by the firm conclude a federal grand jury investigation that began in 1984, when TRW voluntarily disclosed that its employees had engaged in questionable conduct, McLaughlin said.