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Aerospace Contractor Settles Allegations

A former Oxnard aerospace contractor has agreed to pay $12.5 million to settle allegations that the company overcharged the government for hydraulic pumps and valves used on military aircraft, federal prosecutors announced Tuesday.

Pneumo Abex Corp., which moved its aerospace division from Oxnard to Kalamazoo, Mich., in 1993, agreed to the settlement rather than face civil charges under the False Claims Act, said Consuelo S. Woodhead, assistant U.S. attorney in Los Angeles.

“The allegations are improper accounting--basically charging the government with expenses that were not allowed,” Woodhead said.

Specifically, the company was accused of wrongly charging losses on a fixed-price contract as general and administrative expenses, Woodhead said. These expenses, she said, were then billed to the government on other Abex contracts from 1986 to 1990.

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Pneumo Abex has denied the allegations. Company officials in Camarillo and Kalamazoo could not be reached for comment late Tuesday.

Abex Aerospace Division was once Oxnard’s largest employer, with about 1,000 employees at its plant on 5th Street. The company’s only county presence now is a small sales and marketing staff in Camarillo.

The claims against Abex were first raised by Pentagon auditors in 1990 and later probed by Navy, Air Force and Army investigators. The settlement wraps up the five-year case.

“This case demonstrates once again the commitment of this office to redressing procurement fraud and recovering taxpayer dollars,” said U.S. Atty. Nora M. Manella in Los Angeles.

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