Defense contractor RTX agrees to pay over $950M to resolve bribery, fraud claims

RTX Corporation, the defense contractor formerly known as Raytheon, agreed to pay more than $950 million to resolve allegations that it defrauded the government and paid bribes to secure business with Qatar, Report informs via AP.

The company entered into deferred prosecution agreements in separate cases in federal court in Brooklyn and Massachusetts, agreed to hire independent monitors to oversee compliance with anti-corruption and anti-fraud laws and must show good conduct for three years.

The money the company owes includes penalties in the criminal cases, as well as civil fines, restitution and the return of profits it derived from inflated Defense Department billing and business derived from alleged bribes paid to a high-ranking Qatari military official from 2012 to 2016.

The biggest chunk is a $428 million civil settlement for allegedly lying to the government about its labor and material costs to justify costlier no-bid contracts and drive the company’s profits higher, and for double-billing the government on a weapons maintenance contract.

The total also includes nearly $400 million in criminal penalties in the Brooklyn case, involving the alleged bribes, and in the Massachusetts case, in which the company was accused of inflating its costs by $111 million for missile systems from 2011 to 2013 and the operation of a radar surveillance system in 2017.

RTX also agreed to pay a $52.5 million civil penalty to resolve a parallel Securities and Exchange Commission investigation into the bribery allegations and must forfeit at least $66 million to satisfy both probes.

At a hearing in Brooklyn federal court, RTX lawyers waived their right to an indictment and pleaded not guilty to charges that the company violated the anti-bribery provision of the Foreign Corruption Practices Act and the Arms Export Control Act. They did not object to any allegations in court documents filed with the agreement.