Firm Pleads Guilty to Defense Contract Fraud : Overpricing: An anonymous former employee who blew the whistle on El Cajon’s Ametek-Straza will receive $765,000 of $5.1-million settlement under a federal anti-fraud law.

Concluding a probe into defense contracting fraud that federal prosecutors called particularly complex, an El Cajon submarine sonar maker pleaded guilty Monday to two counts of overpricing and paid $5.1 million in damages in a related civil case.

In a case tipped off to prosecutors by a disgruntled former employee, Ametek-Straza pleaded guilty in federal court in San Diego to two counts of overpricing in connection with the 1986 bids for sonar systems used on two classes of Navy nuclear submarines. The pleas resulted in a $110,000 fine.

Under an agreement detailed Saturday in The Times, the firm also agreed to pay $5.1 million to settle charges of overpricing on labor from 1983 to 1987. The anonymous former employee stands to recover $765,000 of the $5.1 million under a federal anti-fraud law designed to reward “whistle-blowers.”

U.S. District Judge Gordon Thompson Jr. approved the deal in a brief hearing Monday morning. Ametek’s eligibility for future defense contracts remains to be resolved, Assistant U.S. Atty. Phillip L.B. Halpern, who prosecuted the criminal case, said at a press conference after the hearing.

Halpern said the case, which stemmed from a 1987 raid at the El Cajon offices by agents from the Defense Criminal Investigative Service and the Naval Investigative Service, was “exceedingly difficult and complex.”

The three-year investigation involved dozens of interviews and so many millions of documents that a separate warehouse had to be used to store all the paper, Halpern said.

“These people didn’t just roll over and play dead,” said Bill Landreth, chief of the Defense Criminal Investigative Service’s San Diego office.

Straza is now the aerospace and electronics division of a separate corporation called Ketema--or Ametek backwards--and Gary Noland, the division’s general manager, said Monday that the company opted to settle rather than endure a costly court battle.

Although company officials were relieved tht the case was over, they also felt frustrated, Noland said.

“The system isn’t fair,” he said. “I’ve heard there were things like 70 witnesses called before the grand jury. To go through this and to have the government do what it did seems ludicrous--but that’s the way it goes.”

The criminal case involved the sale price on two submarine sonar systems used, in part, for navigation under ice, according to a plea agreement filed Monday with the court.

The Navy deploys one system, called the AN/BQS-15, in its Los Angeles-class nuclear attack subs, while it uses the other one, the AN/BQQ-6, in its Trident nuclear attack subs.

As the Navy’s only supplier for the systems, Straza was obligated under federal law to provide up-to-date data detailing production costs, the agreement said. But, in April, 1986, and again in June, 1986, it supplied faulty data that led to inflated contract prices, the agreement said.

Halpern estimated the overrun at about $2 million.

The civil case alleged overpricing of labor charges from March, 1983, through September, 1987, according to the filing.

On behalf of the anonymous former employee, San Diego lawyer Alan J. Ludecke filed the suit in July, 1987. Ludecke has declined to reveal any details about the former employee.