P.M. BRIEFING : GE Fined $10 Million, Agrees to Pay Added $20 Million in Fraud

General Electric Co. today was fined $10 million for defrauding the federal government on a contract to supply mobile combat computer systems and agreed to pay $20 million to settle other civil matters.

One of two officials convicted in the scheme, Gerald Leo, 52, was sentenced to 10 months in prison for his role in covering up the scheme. Sentencing proceedings were continuing for the other official, James Badolato, 42.

The $10-million fine imposed on the nation’s fifth largest defense contractor was the second largest ever for a defense contractor. The fine was agreed to by both GE and the Justice Department and then submitted to U.S. District Judge Lowell Reed Jr. for his approval. The government initially had sought a $25-million fine.

GE also agreed to pay $6.1 million in fines and $2.2 million in restitution to settle a civil case related to the criminal case involving the computer fraud.

As part of the agreement, GE waived its right to appeal its conviction for overcharging the Army $15 million on a contract to build mobile computer systems designed to process data for battlefield operations.