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Rockwell Pays $820,000 Civil Fine in Defense Contract Case

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From a Times Staff Writer

Rockwell International Corp. on Wednesday paid the federal government more than $800,000 to settle civil claims arising from the firm’s conviction earlier this year on charges of overbilling the Air Force for a satellite navigation system.

The company has now paid nearly $1.27 million to satisfy federal court judgments in the case, which require the aerospace contractor to pay about $820,000 in civil penalties, $446,000 in restitution and $5.5 million in criminal fines. The $5.5 million is the largest fine levied in a defense procurement fraud case.

In January, Rockwell pleaded guilty to overbilling the Air Force $500,000 on the $1.2-billion NAVSTAR global positioning system, by which civilian and military planes, ships and land vehicles can use radio signals broadcast by satellites to fix their exact location.

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The $5.5-million criminal penalty, which the company has already paid, was imposed March 6 by Los Angeles U.S. District Judge Consuelo B. Marshall.

A company spokesman said the $820,000 civil fine was not unexpected.

At the time of Rockwell’s guilty plea, company lawyers contended that the overcharges came to light as a result of an internal investigation. It said the fraud was carried out by two former executives of Rockwell’s satellite systems division.

The government accused Rockwell of obtaining secret reimbursement for unexpected repair costs on the NAVSTAR project from a subcontractor and then billing the Air Force for the same costs.

The indictment included a conspiracy count alleging that Rockwell tried to cover up the fraud when federal auditors began asking questions.

Rockwell said at the time that the company was not guilty of any wrongdoing, but that under law it must accept responsibility for criminal acts committed by its employees while representing the company.

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