Defense Firm to Pay Record Criminal Fine
In the largest criminal fraud fine in defense-industry history, Lucas Western said Friday that it has agreed to pay $18.5 million for improperly inspecting gearboxes installed in Navy F-18 jet fighters and Army Multiple Launch Rocket systems.
Separately, Lucas Western disclosed Friday that it has closed its City of Industry plant and transferred several hundred jobs to Park City, Utah. At one time, the Industry plant had 1,200 employees.
The criminal infractions occurred at both the Industry and Utah plants. Lucas, a unit of Lucas Industries of England, pleaded guilty to 37 counts of performing improper inspections, telling the Defense Department that the inspections were performed when, in fact, they were not.
A Lucas executive, Frank Turner, maintained in an interview Friday that the gearboxes met Navy reliability requirements and did not pose a safety hazard.
On the F-18, the gearboxes transfer power from the jet engine to a generator, a hydraulic pump and other equipment. On the rocket launcher, it provides power to move the launcher turret.
The Lucas fine exceeds the previous criminal fine record of $17.5 million, though past civil fines have been larger. The top criminal fines all stemmed from defense work located in the Los Angeles area.
