Rockwell to Pay $1.4 Million to Settle Case : Agreement: The Seal Beach-based company, which was accused of falsifying NASA bills, said there was no basis for criminal prosecution.

Federal prosecutors said Tuesday that Rockwell International Corp. has agreed to a $1.4-million settlement in a criminal fraud case that accused the company of submitting false bills for work on the space shuttle.

The case against Rockwell, based in Seal Beach, and two Rockwell managers stemmed from bills submitted to the National Aeronautics and Space Administration for work done at Rockwell’s Collins Avionics and Communication Division in Cedar Rapids.

An indictment returned in December charged that Rockwell and the two managers conspired to inflate NASA’s bill by falsifying time forms submitted by workers involved in the production and repair of space shuttle equipment.

In accepting the settlement, Rockwell made no admission of wrongdoing and contended that there was no basis for criminal prosecution.

“From the very beginning of the government’s investigation, we believed that there had never been any criminal conduct by Rockwell or its employees, and we repeatedly offered to resolve the matter through a civil settlement,” said J.D. Cosgrove, president of the Collins division.

But Assistant U.S. Attorney Bob Teig, who handled the case for the government, said: “The unfortunate thing is that there were things going on out at Rockwell that had to be investigated.

“Nobody pays almost a million and a half dollars for no reason,” he noted, pointing to Rockwell’s agreement to pay $1.4 million to settle the case.

In addition to the payment, the settlement announced Tuesday also requires Rockwell to distribute a memo to all Collins employees regarding falsification of time sheets and to send all Collins managers and supervisors to two fraud briefings conducted by NASA’s and the Defense Department’s inspectors general.

Collins workers fill out time forms to show the hours they spent on each project so that those hours can be billed specifically to that project.

The memo to be distributed to workers under the settlement agreement informs them that they must advise the offices of the NASA or Defense Department inspectors general if they are ever asked to record incorrectly the hours they have worked.

In return for Rockwell’s agreement, the Justice Department agreed to put off prosecution for one year. If, after that time, Rockwell has abided by all agreements in the settlement, the charges will be dismissed.